NEW YORK (TheStreet) -- The hedge fund community was able to close the S&P 500 index at a new all-time high in Friday's trading. I will give the hedge funds kudos for that.
But I will also remind traders and investors out there that it was all smoke and mirrors. The S&P 500 Trust Series ETF (SPY) had its lowest trading volume in 2014. Not only that, I went back to June 2012 and the SPY volume on Friday was the lowest since then, excluding the early Christmas Eve closings.
The DJIA closed up 63.19 points at 16606.27 and the S&P 500 closed up 8.04 at a new all-time high of 1900.53. The Nasdaq finished up 31.47 at 4185.81 and the Russell 2000 closed at 1126.19, up 12.32.
I am sure most of the Wall Street pundits will focus entirely in the new all-time closing high this Memorial Day weekend and tell you how strong this market is and we will continue to go higher. I have no clue what the market is going to do.
Everyone is in the predicting business because that is what people want to hear. I am here to just tell you that a market without volume has the potential to create a liquidity issue.
Disregard the pundits who say it is different this time. It is never different. It may take on a different form but it never changes.
As of the close of trading on Friday, my internal algorithm numbers have the Nasdaq in extreme overbought territory next Tuesday if it opens higher. The momentum stocks that I have been writing about will all be extraordinarily overbought. This can only mean one thing: This market comes down next week.