The Russell 2000 small cap index (ARCA:IWM) has been a perennial laggard during much of 2014 and is now on the verge of a highly significant breakdown:
A classic complex head-and- shoulders top has formed with many of the textbook signs (higher volume on the left shoulder, large red candlesticks along with accelerating volume on the right shoulder).
The daily chart also shows an abundance of large red candlesticks along with smaller white candlesticks in recent weeks; a sign that sellers are becoming more aggressive as buyers exhibit fatigue:
The stage is set, the April/May lows now become a crucial line of defense for the bulls. A break below those lows would confirm that a major market top has been hammered out during 2014 and we can begin talking about a 10%+ correction for large cap equities (S&P 500).
Market leader Apple (NASDAQ:AAPL) is also coming under heavy pressure today as it breaks the pennant to the downside, the $92 area now becomes a minimum downside target:
