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This rally is 'false' and here's the tell: Trader

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Stocks continued to grind higher Wednesday with the S&P 500, and tracking for their largest two-day gains since early March — but the lack of participation in a crucial area of the market has one trader calling foul on the rally.

"I'm taking a look at a very interesting divergence in two key markets that I think could lead to a potential false breakout in the unbelievable rally that we've seen in the S&P 500," Todd Gordon told CNBC's "Trading Nation" early Wednesday. The S&P has surged 2 percent since Tuesday's opening bell, pushing the large-cap index near a one-month high.

However, it's the absence of selling pressure in the bond market, which typically moves inversely with equities, that has Gordon erring on the side of caution. "The bonds are not confirming where the S&P is going," he said.

Looking at a chart of the TLT long-term bond ETF versus the S&P 500, Gordon noted that as stocks move higher the ETF has not broken its respective support level. "We'd like to see the TLT pushing lower indicating that the market is driving out of the safety of bonds and into stocks," said the founder of TradingAnalysis.com. "[Investors] are holding their bond positions and I think that indicates a false breakout in the S&P," he said.

The S&P 500 was up more than half a percent midday Wednesday.