It's a pain in the neck but you must add the fluid to the dip stick tube. They make a small funnel for this. After you add you must wait a few minutes for the fluid to drain down or you will get a false reading on the stick.
Your 1996 Mercury Grand Marquis may need a new transmission or something as simple as transmission fluid.
On a 1999 Mercury Grand Marquis : The automatic transmission fluid level dipstick is in the engine compartment , near the firewall , towards the passenger side of the engine
At the front of the engine , towards the drivers side of the engine ( power steering fluid reservoir on a 1998 Mercury Grand Marquis )
DOT 3
On a 1989 Mercury Grand Marquis : The automatic transmission fluid level dipstick should be in the engine compartment , near the firewall ( the metal wall that divides the engine compartment from the passenger compartment ) just towards the passenger side of the vehicle ( where the rear of the engine connects to the transmission )
According to the 1996 Mercury Grand Marquis Owner Guide : ( DOT 3 brake fluid , meeting Ford specification ESA-M6C25-A )
Into the power steering reservoir.
Thru the dip stick tube, which you should find between the engine and the fire wall on the passengers side. Use a transmission funnel, and do not over fill. Follow instructions.
I was looking at a picture in the 2003 Mercury Grand Marquis Owner Guide and it shows the power steering fluid reservoir at the front of the engine compartment between the engine coolant reservoir and the engine air filter box
You pour it through a thin necked funnel into the dipstick tube
NO
It is part of the power steering pump assembly.