NEW YORK (CNN/Money) - The stock market has a nice tone to it lately, but bearish sorts argue that there is little fuel for the fire.

It just doesn't seem like there's much of a cash horde spoiling to get into the market. Mutual fund coffers are basically bare, holding just 4.3 percent of their portfolios in cash. With the exception of March 2000 (remember what happened then?), that's the lowest cash level in 30 years. Nor do individual investors appear anxious, after getting beaten so badly, to start pumping significant amounts of money into equity funds. And even if they wanted to, worries about the soft economy might hold them back.

"You don't start a new bull market with 4.3 percent cash and I don't see a rush by the public to come in here," said Larry Rice, vice president at Janney Montgomery Scott.

Then there is the dollar, which has been struggling even as U.S. stocks run higher. That could be a sign that global investors are pulling money out of the United States. In fact, a recent Merrill Lynch survey of global fund managers said the United States was the region they were least likely to overweight in their portfolios.

Eye on the market From fearful to fearless Betting on a rebound The market needs you Into thin air The dollar disagrees

But there is one powerful source of funding that the market has yet to tap into -- a huge raft of short interest. The shorting strategy, where investors sell shares they have borrowed in the belief that they can buy them back at a lower price, has gained popularity over the past three years as such bets against the market have paid off well. This week the New York Stock Exchange said that total short interest on the Big Board rose to over 8 million shares. Short interest now represents 2.3 percent of total shares on the exchange -- as high as it's ever been.

Shorting is a dangerous strategy -- the potential for loss, if the stock you've shorted starts going higher, is unlimited. To protect themselves, good short sellers are extremely disciplined. When one of their bets starts going wrong, they move to buy back the shares they have sold short. These buys, in themselves, push stocks higher still.

Such short covering rallies, as they are called, don't last forever. But they can be powerful -- powerful enough, in this instance, to push stocks to new highs for the year.  

-- Justin Lahart is a senior writer at CNN/Money covering markets and investing.