Like a Broken Record, the New Volume Low Just Goes On and On...

NEW YORK (TheStreet) -- Another day of the same old market on Wednesday. The S&P 500 set another all-time closing high at 1927.88, finishing up 3.64 points. The DJIA closed up 15.19 at 16737.53, just short of an all-time closing high. The Nasdaq closed up 17.56 at 4251.64 while the Russell 2000 was up 5.07 at 1131.22.

What did change on Wednesday is the S&P 500 Trust Series ETF (SPY) closed with a new volume low in 2014. The SPY finished with just under 55 million shares traded. This was roughly six million shares short of the Jan. 22 low-volume mark of 60.8 million shares traded.

There is something fundamentally wrong with this stock market. The lack of liquidity is not a good thing. I am not going to speculate what may or may not occur but if the hedge fund machines decide in unison to start selling there may be no machine underneath this market to absorb all that selling. Hence, my fear of lack of liquidity in this market.

We have seen situations similar in the past. The 1,000-point drop in the most recent past brings back memories.

I will once again reiterate my stance that the only players, or buyers, in this market are the hedge funds. They have caused extraordinarily overbought conditions at the present time.

My internal algorithm process is currently signaling the large-cap sector with a 5:1 ratio of overbought stocks versus oversold stocks. That is unprecedented in my work.

Extreme caution is warranted on the part of traders and investors alike. You must be patient and let this euphoric buying and chasing play itself out. Emotional buying for fear of missing is not a strategy for success. We are closer to a top as opposed to a bottom.

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