NEW YORK (TheStreet) -- Another all-time bubble high for the S&P 500 as the index closed at 1890.90 on Wednesday, up 5.38 points. The DJIA closed up 40.39 at 16,573. The Nasdaq closed at 4276.45, up 8.41 and the Russell 2000 gained 4.10 to close at 1192.
The unofficial SPDR S&P 500 ETF (SPY) volume was the lowest since the S&P 500 low last Thursday. Not only was the volume on Wednesday the lowest in four days, but it appears to be the lowest volume day since Jan. 22, 2014.
The SPY volume on Wednesday, or lack thereof, was significant enough to mention. There is absolutely no buying conviction in this market right now. Most of the volume is coming from the algorithm programmed shorts that are covering their books at the highs because they shorted at the market lows last week.
It appears that the short hedge fund community that sold the S&P 500 lows last Thursday, threw in the towel today, and bought the all-time highs. I have said on many occasions now that the short hedge funds are notorious for doing that. Their timing could not be any worse.
Buying this all-time high is the absolute wrong strategy to have. The S&P and DJIA will now be well into overbought territory Thursday on a green open. The Nasdaq and Russell 2000 are not close to those overbought levels, but we have had a 2-tiered, out-of-sync market for a while now.
This market is going to roll over in the very near future, starting on Thursday or within a few days after that, according to my algorithm process. That is the same process that signaled the S&P low last Thursday. Caution is warranted right now. Buying this market at these levels takes on much risk. Having a risk-management process is very important right now.