NEW YORK ( TheStreet) -- That the Standard & Poor's 500 Index's move above 2,000 was accompanied by low volume Tuesday may not be as ominous as many believe.
The PowerShares QQQ (QQQ) , SPDR Dow Jones Industrial Average (DIA) and SPDR S&P 500 (SPY) moved to record levels this week on improving U.S. macro-economic data and talk of stimulus in Europe, finally. And this comes despite Russia apparently sending troops into Ukraine.
>>Read More:10 Stocks Carl Icahn Loves in 2014
SPY data by YCharts
One cautionary note, however, is that the move of U.S. equities to record highs has come on low volume, perhaps because investors may be reluctant to invest fresh capital at levels where valuations appear to be stretched.
The narrative has been the same for many months now: The economy is improving and corporate results remain steady, but investors are waiting on the sidelines. The issue of low volume, though, appears to be a structural one. The chart below shows the average monthly volume of the S&P 500 from 1950 to the present day. Average monthly trading volume in the S&P 500 remained relatively flat from 1950 until the turn of the millennium, when it grew exponentially before peaking in October 2008. >>Read More: ConocoPhillips, Cut by Warren Buffett, Can Be Yours on the Rebound
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV