Since the gold and oil markets have been pricing in a meaningful impact on the marketplace from this crisis…it’s not out of the question that the stock market will follow those other markets and see an outsized reaction before long
If the Russell 2000 small-cap stock index falls much more from current levels, it’s going to send up a big warning flag on this part of the stock market…on a technical basis.
Later this week (and early next week), we get some KEY bank earnings. Given the technical make up of the KBE bank ETF (and the XLF financial stock ETF)…these earnings could be VERY important as to how this group and sector acts as we move through the second quarter.
We’re seeing some cracks in Europe’s stock market…so if that market falls much further from here, it will raise some warning flags. That, in turn, would signal that this market is going to have a much harder time keeping up with the U.S. market.