For the first time since November 2012 the Russell 2000 small cap index (IWM) closed below its 50-week simple moving average on a weekly closing basis:

Click to enlarge

IWM_Weekly

50-week SMA in blue

If we zoom in things look a bit more troubling:

IWM_double_top

A double-top is clearly discernible as relative strength (RSI) approaches fresh 2-year lows

And the monthly chart is even more troubling.....

IWM_Monthly_8.1.2014

The first monthly bearish outside reversal since May 2010 (the month of the 'flash crash')

Meanwhile, the herd continues to express little cause for concern while using trite aphorisms such as "the bears have been wrong for 5 years", "Don't get scared out of this bull market" and even seasoned market pros are exhibiting extreme complacency:

Complacency_Tweet

To top it all off market leverage has essentially never been higher than it is now.....

NYSE_margin_debt

"When you combine ignorance and leverage, you get some pretty interesting results." ~ Warren Buffett

Read also:

The End of QE and What it Might Mean

Mounting Warning Signs

The Smart Money is Getting Worried