The iShares Russell 2000 Index (NYSE:IWM) ETF is the first index to break a major technical level. IWM has been lagging its larger cap peers for several weeks, and didn't run to new highs the past few weeks along with SPY and DIA. This week it suffered a steep decline and severed its October lows. This set a lower low, and also confirmed a double top reversal pattern in the small cap sector. The measured target for this reversal is near $52, which would have IWM testing the July breakout level. IWM is often looked to as a leader, as it shows the appetite for risk prevalent in the market place. If investors are shying away from small caps, it often shows a fear of putting money to work, and a rotation into safer assets. This action is often associated with declines in the markets.
