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Small Caps: Back-To-Back Down

|Includes:iShares Russell 2000 ETF (IWM)

The iShares Russell 2000 ETF (NYSEARCA:IWM) is clearly showing signs of a major top and reversal.

Those that are still long the IWM are officially trapped. The reversal is confirmed as we now have a lower weekly low.

If this session closes lower and near its current low, then we will have back-to-back down days with a combined loss near 3%.

The IWM has been losing power since November last year and it now looks as if any remaining upward momentum has been spent.

IWM Weekly Chart

Chart by TeleChart

Even a modest 38% retracement from the 2009 low, puts IWM nearly 30% lower than its 120.97, high.

Be on watch for the "it's a buying opportunity" crowd.

Disclosure: The author is long TZA.

Stocks: IWM