ROOM FULL OF MEASLES?

Measles is back.

In case you haven't been paying attention, measles, along with some other contagious disorders like chicken pox and TB, are making their rounds again. Now don't get confused. Measles and chicken pox are caused by viruses, TB a bacillus. There's a difference.

There's been much talk lately about small caps, their recent plight and the possibility of their being a leading indicator. Many small caps are domestic in that they do little if any business outside US borders. As such some view them as a voucher of sorts for the economy.

With all the noise--the usual suspects from jobless claims, earnings news and high P/E ratios, the Nasdaq changing hands around 35  times earnings--investors look a bit jumpy. The iShares Russell 2000, a proxy of sorts for the small cap universe, shed nearly 9% last week as investors pulled over $2 billion out of the ETF.

Either there's something afoot here or someone somewhere is trying to shake the heard down to go long at cheaper prices. Now before the next teardrop falls recall the ETF still sits on nearly $24 billion. But a 9% decline is going to open those out-pouchings of investor brains, their eyes. 

And if you're a moving average kind of  guy you won't find much solace there either. So the question remains. Is this going to be like a room full of measles?  The experts say no. What do you say?