S&P 500 Hits a New High on the Lowest Volume of 2014

NEW YORK (TheStreet) -- The stock indexes continued their assault on new record highs again on Tuesday. The DJIA was up another 29.83 points to close at 17106.70 and the S&P 500 closed over 2000 for the first time in its history, up 2.10 at 2000.02. The Nasdaq was higher by 13.29 at 4570.64 while the Russell 2000 gained 9.95 at 1175.17.

These closing numbers and new all-time highs make for good talking points for the financial media but I could care less.

The more important fact is the S&P 500 Series ETF (SPY) volume came in at just over 47 million shares. That is not only the lowest trading volume of 2014 but was one of the lowest trading volume days in the last two years.

There is something seriously wrong with this stock market. Liquidity is not there.

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Total U.S. stock market volume on Monday was 35% lower than its average daily volume in 2014. When, not if, the hedge funds decide to start selling there will be absolutely no liquidity in this market and things can spin out of control in a hurry.

I will not be surprised to see this stock market down 3%-5% on any given day.

Traders and momentum players, good luck to you playing the long side of this market. The risk is massive at the current time.

Many Wall Street pundits will tell you that this market is not in a bubble. I will take the opposite side of that argument and tell you that the Russell 2000 is currently trading at 55 times its trailing earnings. If that is not bubble, I do not know what is.

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