The U.S. equity market ended the second quarter on a strong note, and a sharp rally in the first two weeks of July has demonstrated that there is still life in this bull market, writes J.D. Steinhilber, founder of ETF newsletter and investment management firm Agile Investing. The rebound from the March/April correction has been broad-based, with the best gains occurring in the small and mid-cap indexes, which have moved to new all-time highs.
While the S&P 500 has gained 8% since the late April lows, the
S&P Small-Cap 600 and Mid-Cap 400 indexes are up 13% and 12%,
respectively. Such broad-based participation is typically a sign of a healthy stock market, but we think it is important not to get caught up in the current enthusiasm – just as it was important not to turn prematurely bearish during the March/April sell-off.
We are not looking to add any long positions on this “break-out