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 - Get Report) 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.

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.

We shall see what the hedge fund players have in store for Wednesday. The four major stock indexes are now deep into extreme overbought territory. Something has to give in the next couple days. This is not sustainable action on the upside.

Using my algorithm numbers I will continue to play from the short side or extreme overbought side of this market. When my algo numbers have zero small- and large-cap stocks that are oversold versus over 200 that are extreme overbought, not much more needs to be said.

On Tuesday, I sold my Market Vectors Gold Miners ETF (GDX - Get Report) for a nice 2% profit and also covered most of my Brinker Intl. (EAT - Get Report) short position at a nice profit. I added to my Direxion Small Cap Bear 3x (TZA - Get Report) long position and Vector Group (VGR - Get Report) short position and started ProShares Ultra Short QQQ (SQQQ - Get Report) long. I am also long (SDS - Get Report) and short (MX - Get Report) .

At the time of publication, the author was long TZA, SDS and SQQQ and short MX VGR and EAT, although positions may change at any time.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.