While the S&P 500 hit a new record high Wednesday, and the Dow Jones Industrial Average did so Monday, the Nasdaq Composite and the Russell 2000 index of small-cap stocks have lagged behind since March.

That means it's not a real bull market, says Bert Dohmen, president of Dohmen Capital Research. Indeed, the five-year equities rally has been largely built on share buybacks, he writes on Forbes.com.

Editor’s Note: Retire 10 Years Earlier With These 4 Stocks

The number of stocks reaching record highs has fallen short of that recorded during true bull markets, Dohmen says.

"The only big buyers of stocks during the past five years have been companies doing buybacks of their own stocks," he writes. "It’s almost $1 trillion per year. Every other big traditional buying group has been a net seller."

The buybacks lift earnings per share by reducing the number of shares, making the stock options of top management more valuable, Dohmen says.

This means the bull market is "just smoke and mirrors," he writes. "This is a well-engineered bull market of the big-cap indices. It will end when companies stop the buybacks."

The S&P 500 and Dow were little changed Wednesday afternoon, as investors await Thursday's European Central Bank meeting and Friday's U.S. jobs data.

"The market is positioning ahead of the events later this week," Michael James, managing director of equity trading at Wedbush Securities, told Bloomberg News. "We’re just marking time until we get to the real market-moving decisions."

Editor’s Note: Retire 10 Years Earlier With These 4 Stocks

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