A Euphoric Stock Market Setting All-Time Highs Built on Air

NEW YORK (TheStreet) -- Another new all-time closing high for the DJIA and the S&P 500 on Thursday. Is anyone surprised? I did not think so.

The DJIA closed up 92.02 at 17068.26 while the S&P 500 was higher by 10.82 at 1985.44. The Nasdaq climbed 28.19 to close at 4484.92 and the Russell 2000 finished up 8.65 at 1208.15.

The Russell 2000 is the only index that has not surpassed its March 2014 highs. It is very close but still a fraction away.

Thursday's holiday-shortened close had the same exact feel that the other trading days have had. The stock market was higher on air.

>>FIFA World Cup Still a Huge Draw Without U.S. Team

The S&P 500 Trust Series ETF (SPY) volume closed at 52.5 million shares traded. One year ago today, July 3, 2013, the SPY closing volume was 75.2 million shares. I will continue to highlight this trading volume fact because it will become a huge issue. That issue will come to the forefront when the short hedge funds are at the end of their "throw in the towel, cover at any cost" mindset.

I suspect we are closer to that reality than any perma-bull may think. The amount of chest pumping, euphoric excitement over this bull stock market is now at the extreme level.

One issue that has been extraordinarily important in this bull run to all-time highs with no correction has been the shear number of hedge funds that have been short the S&P 500. Hopefully, these past few days, with this no-volume melt up, took down some of the two-year highs in S&P futures/options net short positions. I suspect that is what occurred this past week.

Time will tell, but the internal evidence, according to my algorithm process, is confirming this phenomena. The lack of trading volume is also suggesting no players in the stock market other than hedge funds.

If you liked this article you might like

Market Is on the Straight and (Very) Narrow

Look Back to Go Forward

Stock Observations; Reviewing Equities: Doug Kass' Views

Even North Korea's Kim Jong Un Can't Stop This Epic S&P 500 Stock Rally

Robots Might Be Biggest Obstacle for Stock Market Bears