NEW YORK ( TheStreet) -- If it feels like a strange market environment, that's because it is.
Back in February, I wrote of the risks in the small-cap indexes (Russell 2000) and the potential for a massive rotation into large caps to begin. Small caps had been outperforming large caps for over 15 years, I argued, leaving their shares priced for perfection and trading at a significant premium to large caps.
By some measures, small caps were trading at their highest valuations in history. While I expressed this concern, I would not have guessed what would happen next.
In March and April, for the first time in history, we saw consecutive monthly declines in the Russell 2000 Index while the S&P 500 Index posted consecutive monthly gains. You read that correctly. This divergence had never occurred before in the history of these two indexes.