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The S&P 500 Closes at Yet Another All-Time Closing High on No Volume

Stocks in this article: SPYFBDLRBECNARCOINOMSFT

NEW YORK (TheStreet) -- Well, the S&P 500 index closed at a new all-time high on Wednesday at 1987.01, up 3.48 points. This was all accomplished by volume that was -- you guessed it -- pathetic. The S&P 500 Trust Series ETF (SPY) volume came in at another dismal 60 million shares traded.

To put this in some time of perspective, the volume on up days decelerates and volume on down days accelerates. The volume on Tuesday was down 16% versus its one-month average. Over its three-month average the volume was down 19%.

So, while all Wall Street pundits focus on the new all-time highs, I focus on the fact that there is no volume in this market. The marketplace is controlled by the hedge funds because there is no other players in the market. So, all-time bubble highs need to be put into proper context.

Why Facebook Shares Are Surging

Why Delta Shares Are Poised to Fly Higher

Stock Market Today: Record Intraday Moves for S&P 500 on Apple, Pepsi Earnings

With all that said, the DJIA closed down 26.91 points at 17086.63 and the momentum tech stocks that are the Nasdaq finished higher by 17.68 points at 4473.70. The Russell 2000 was higher by 1.96 at 1158.11 and is still in "Trend Bearish" territory.

An interesting fact was that the S&P 500 closed at 1987.01. Before the market opens every morning I post a daily trading range for my subscribers at www.strategicstocktrade.com. That range today was Buy Trade-1960 and Sell Trade-1987. You cannot get more accurate than that.

As more earnings numbers come in after the market close, Facebook (FB) appears to be the big winner in after-hours trading. So the momentum hedge fund chasers will be out in full force covering their short positions and pushing the stock higher. As is always the case, the hedge funds will be covering their positons as FB inches to an extreme overbought condition. You have to love how those hedge funds operate in unison.

As for what traders should be doing if they have a repeatable risk management process, we continue to scan for those extreme oversold stocks and buy those stocks. If traders are fortunate enough to have a process that allows for momentum purchases once a stock breaks outside its upper channel price, those stocks can also be purchased for short-term gains.

The precise timing of those trades are as follows: Buy the stock right before the close on the upper channel break and sell it the following day after the market opens. That is where the momentum players come in and buy the stock to move it higher.

On Wednesday, I sold my Digital Realty Trust (DLR) for a nice gain as an end-of-day momentum play and sold my Beacon Roofing Supply (BECN) for a better than 1% gain. I added to my Arcos Dorados Holdings (ARCO) and started new positions in Inovio Pharmaceuticals (INO). I also shorted Microsoft (MSFT) at the close.

At the time of publication the author was long ARCO and INO and short MSFT.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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