This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

S&P 500 Hits a New High on the Lowest Volume of 2014

NEW YORK (TheStreet) -- The stock indexes continued their assault on new record highs again on Tuesday. The DJIA was up another 29.83 points to close at 17106.70 and the S&P 500 closed over 2000 for the first time in its history, up 2.10 at 2000.02. The Nasdaq was higher by 13.29 at 4570.64 while the Russell 2000 gained 9.95 at 1175.17.

These closing numbers and new all-time highs make for good talking points for the financial media but I could care less.

The more important fact is the S&P 500 Series ETF (SPY) volume came in at just over 47 million shares. That is not only the lowest trading volume of 2014 but was one of the lowest trading volume days in the last two years.

There is something seriously wrong with this stock market. Liquidity is not there.

Total U.S. stock market volume on Monday was 35% lower than its average daily volume in 2014. When, not if, the hedge funds decide to start selling there will be absolutely no liquidity in this market and things can spin out of control in a hurry.

I will not be surprised to see this stock market down 3%-5% on any given day.

Traders and momentum players, good luck to you playing the long side of this market. The risk is massive at the current time.

Many Wall Street pundits will tell you that this market is not in a bubble. I will take the opposite side of that argument and tell you that the Russell 2000 is currently trading at 55 times its trailing earnings. If that is not bubble, I do not know what is.

We shall see what the hedge fund players have in store for Wednesday. The four major stock indexes are now deep into extreme overbought territory. Something has to give in the next couple days. This is not sustainable action on the upside.

Using my algorithm numbers I will continue to play from the short side or extreme overbought side of this market. When my algo numbers have zero small- and large-cap stocks that are oversold versus over 200 that are extreme overbought, not much more needs to be said.

On Tuesday, I sold my Market Vectors Gold Miners ETF (GDX) for a nice 2% profit and also covered most of my Brinker Intl. (EAT) short position at a nice profit. I added to my Direxion Small Cap Bear 3x (TZA) long position and Vector Group (VGR) short position and started ProShares Ultra Short QQQ (SQQQ) long. I am also long (SDS) and short (MX) .

At the time of publication, the author was long TZA, SDS and SQQQ and short MX VGR and EAT, although positions may change at any time.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $95.18 1.60%
FB $117.44 -0.95%
GOOG $692.33 -0.84%
TSLA $232.12 -4.00%
YHOO $36.02 -1.40%


Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,063.37 -18.06 -0.87%
NASDAQ 4,763.2240 -54.37 -1.13%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs