NEW YORK (TheStreet) -- 1. Small-cap stocks have been getting crushed since mid-March. The iShares Russell 2000 (IWM) - Get iShares Russell 2000 ETF Report exchange-traded fund is down more than 10% since then.

The average market cap of every company that makes up the Russell 2000 is roughly $1.3 billion. The recent selloff largely represents a flight away from high-risk and speculative stocks. 

Take a look at the chart below. It perfectly illustrates the dynamics at work within the stock market right now. This year, the S&P 500 has remained mostly flat while the Russell 2000 has continued to crater:

Speaking of risk: the $SPX looks a little queasy, but small cap ($IWM) is in real pain:

? John Kicklighter (@johnkicklighter) May. 15 at 01:22 PM

2. Bonds have become some of the best performing asset classes of the year. Treasuries, in particular, have been melting upward.

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Today, a closely followed and discussed ETF, the iShares 20+ Year Treasury Bond (TLT) - Get iShares 20+ Year Treasury Bond ETF Report climbed to its highest level since June, 2013. It's now up 12% year-to-date. That's a much better performance than any of the major equity indexes:

Long term look at $tlt. Broke 20 month resistance after a quick show of respect

? Aaron Jackson (@a_jackson) May. 15 at 02:06 PM

For the rest of the summer, market participants will be deeply focused on small caps and treasury bonds. Together, they are shaping this year's market.

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At the time of publication, the author held no positions in any of the stocks mentioned.

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