The small caps in the Russell 2000 Index seem to be stealing the show today with their notable weakness. While they may not bring the whole market down with them, it should be obvious that the tape is far more selective with long breakout plays being permitted to follow-through than what we have seen for much of 2013.
A recurring theme here has been that the main leaders since November 2012, financials and small caps, need not stage a major leg higher from here in order to sustain the bull case. However, they do need to not fall apart.
With this in mind, returning to our 30-minute chart of the IWM, ETF for the Russell 2000 Index, we can see a heavy sell volume move down below a major price spanning the past month. Into the final hour, it will be interesting to see if bulls can negate potential bear flag with a close above it.
Either way, the market has become increasingly selective and more devious.
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