NEW YORK (TheStreet) -- The DJIA and the S&P 500 both closed trading on Wednesday at new all-time highs once again. This really is becoming quite boring.
The DJIA was up 20.17 points at 16976.24 and the S&P 500 was higher by 1.30 to close at 1974.62. The Nasdaq was fractionally lower at 4457.73 while the Russell 2000 was down 6.45 points at 1199.50.
Whatever or whoever is causing this stock market to soar into the stratosphere is now irrelevant. The numbers are what they are. This does not mean that as a trader you should just throw in the towel and start buying at these all-time highs.
There continues to be an underlying fundamental problem with this market. And that problem is lack of volume or liquidity.
You have read enough of my articles to know that the lack of trading volume is a big issue with me. To put that in perspective, the S&P 500 Trust Series ETF (SPY - Get Report) volume set a new yearly low in 2014 on Wednesday coming in at just over 52 million shares traded.
And if you compare the SPY trading volume on July 2, 2014, to July 2, 2013, you will see that the trading volume was three times higher last year, coming in at 154.8 million shares.
The argument from old Wall Street pundits will be that it is different this time. It is not different this time. There is a serious lack of the small retail trader and investor in this market. The entire volume is now controlled by the hedge fund community. Those hedge funds act in unison. That is why we are not seeing a selloff taking place. When the machines decide to sell it will be fast and furious.
I expect trading on Thursday will be the slowest in memory as the stock market has an early close at 1:00 p.m. EDT.
It is now more important than ever to have a risk management trading process in place to navigate around in this market. The Nasdaq index is well into overbought territory. This is being fueled by the tech-heavy stocks. At the same time, the DJIA and S&P 500 are not close to being overbought. The Russell 2000 internal algorithm numbers are heading down. So we have a market that is out of sync.
The fact that all indexes have a negative divergence with price creates a risk that most traders and investors do not understand. That trading process is critical. You need signals that tell a trader when stocks are overbought and oversold.
On Wednesday, I covered my Splunk (SPLK - Get Report) short position from Tuesday with a terrific gain. I also covered most of my Twitter (TWTR - Get Report) short for a nice gain. This cannot be done without having an internal algorithm signal. The 94% success rate at www.strategicstocktrade.com is all time stamped and cannot be disputed.
At the time of publication the author was short TWTR.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.