Cash is king — and corporate America is swimming in an ocean of it.
According to S&P Dow Jones Indices, companies in the S&P 500 have a total of $1.35 trillion in cash on their balance sheets — and one technical analyst says that could drive stocks to record highs.
"I think if we could get a little bit of clearer fiscal policy and repatriation of those dollars that come in we could actually see stepped up share buybacks or dividends and really start to see that money go back to work for shareholders," Craig Johnson said Wednesday on CNBC's "Trading Nation." "Ultimately that will push this market higher."
Companies spent $589.4 billion on buybacks in the period that ended in March 2016 , up 12 percent from a year earlier per data from S&P Dow Jones Indices.
For those comparing the current environment to that of the dot-com bubble, Johnson noted one key differential.
"If you look at the number of investable stocks on the New York Stock Exchange today, we have about 25 percent fewer stocks than we did in 2000," said the Piper Jaffray technician. "That, plus all this cash is going to underpin a structural move higher in equity markets and something we could use in this tepid earnings growth environment."
Johnson expects the S&P 500 to rise to 2,350 by the end of 2016, a call he has vehemently stood behind even in the face of heightened volatility.
For Eddy Elfenbein of the Crossing Wall Street blog, America's cash hoard could be dangerous for the market.
"The problem is that so much of that cash is held outside of the United States. The companies don't want to bring it home or it's a taxable event," he said Wednesday on "Trading Nation." "When you talk about cash for a single company that's a good thing, but on a macro level all of this cash — it's not a good thing for the system as a whole."
"What really has to happen is the tax code needs to change and be more user friendly for shareholders to bring some of that money home," he said.