The Russell 2000 — and the ETF replicating it, IWM — are what I call JUNK as they are the lowest quality equity possible, compared to the Dow Jones Industrial which would be considered quality.
Well, the Russell had been making new historical highs proving that speculation was running wild. Unfortunately for those who were playing with fire, when risk is reassessed, Junk is what gets the most hammered.
As you can see below, IWM is down more than 17% in just 5 trading session. It's already down 25% from the peak, and it's getting hammered in the after hours trading.
Interestingly, it might also be a good candidate for a short term bounce — so I kept my put option on this pile of garbage, but also went long the ETF trying to game it.
Of course, if BofA defaults tomorrow, the bloodbath will become worse, but I'm sure tomorrow the market will find a good reason to rally.