Economist Mohamed El-Erian says the stock market has been rising because too much money is chasing too few opportunities.

The Trump trade, or investing in stocks in hopes that the president's policies will boost economic growth, isn't the main impetus driving the market, the Allianz chief economic advisor told CNBC.

"This is no longer a Trump trade. This is somewhere between a reflation trade, but much more importantly a liquidity trade. This is a liquidity-driven market," the Newsmax Finance Insider said.

"I have underestimated the strength of the liquidity injections. Not just from the Fed, but I think the increase in [income] inequality has meant there's been less consumption and more investing in the market," he said.

"And the profit share is so high that the companies are putting the money back into the marketplace," he said.

However, he arned that global central banks are "distorting markets" and making investors "do things we and they 're going to regret," he said.

El-Erian said there's a hope in the stock market that the liquidity trade hands off to the reflation trade or betting on investments that would benefit from an increase in inflation and stronger economic growth, CNBC explained.

If Trump's proposed policies such as tax cuts and deregulation were to become reality and boost the economy as promised, the reflation trade may take over as the biggest driver of the market, El-Erian said.

However, there are pockets of apparent resistance. 

Investors reportedly pulled $3.5 billion from the biggest exchange-traded fund that tracks the Russell 2000 Index last week, spooked by the steepest selloff in the domestically focused stocks since before Trump’s surprise election win.

The biggest outflow in 10 years comes less than a month after small caps roared to an all-time high on speculation Trump administration policies would supercharge growth in the world’s largest economy, Bloomberg reported.

However, some experts are warning a tumble may loom.

“There’s some nervousness out there and people are staying in the most liquid stocks,” said Andrew Brenner, head of international fixed income for National Alliance Capital Markets. “I think we’re getting ready for a much more significant correction.”