Comeuppance:
Deserved reward or just deserts, usually unpleasant: He finally got his comeuppance for his misbehavior.

When I see the Russell 2000 getting hammered, I often think of all the failed revolutions throughout history. Sure, there are probably more professional traders in the small-caps and highflyers, but the index and a large chunk of its participants reflect that kind of us-against-the-powerful that underlines rebellion. I am not sure what the exact number is, but no doubt, many more would-be revolutions have failed than have succeeded, which makes the meltdown in the Russell even more compelling.

There is no doubt that the Russell was ahead of itself, no matter how one measures value, growth, and hype. In addition, there were no metrics which justified the extended run into 2014 but there was an old Wall Street golden rule: "Ride your winners until they collapse." Well, that collapse is here with the index in the midst of its worst multi-day drubbing in years. The question is whether what's happening is the beginning of a much more pronounced decline, with the recent action being only a precursor to the kind of comeuppance yet to come.

In the past, I have felt that certain selloffs in the Russell were orchestrated by the master of Wall Street, to put upstart investors in their place and off that self-directed train, forcing them back in line relying on the experts, instead of their gut and their commonsense. To that end, small investors tend to hold through peaks and sell into troughs. Getting in the game is not their weakness, and despite the lure of Joe Kennedy and the shoeshine kid novice, and the non-pro investors' worst sin is not coming to the party late - it's bolting at the wrong time when the pain is greatest.

Of course, it is easier said than done - not panicking.  Moreover, hindsight is 20-20, and history is a great guide for the future. Even as more money trickles out of equities to bonds and emerging markets, this selloff is still about rotating out of small-cap names and highflyers, and into safe, or oversold equities.

Case in point:

It was only two months ago when investors figured that IBM was too much of a lumbering giant losing to the upstarts in the Cloud, while its management reluctantly trimmed its hardware businesses and even then, IBM's CEO told the world that hardware was still a critical part of Big Blue. IBM shares stumbled from $190, to a 52-week low of $172 in a matter of days.

Yesterday, IBM finished north of $192 a share.

Well, one could say that Big Blue is one of the oldest members of the Dow Jones Industrial Average, and I would agree, it is a huge company with a ton of money and history for reinventing itself. (By the way, the pedigree of companies is important to us, and I would suggest to anyone looking for a good read on a great corporate leader, to check out 'The Maverick and His Machine: Thomas Watson Sr. and the Making of IBM.')

Okay, but it's the same stock very smart people had given up on a few weeks ago, but if you need a better example of blind rotation determined to hang out in equities, check out Symantec (SYMC). Recently, the company fired yet another CEO, which sent its shares reeling to a 52-week low of $18.00, yesterday however, the stock finished at $20.41. If I had to own a company in technology security for the next year to three years, it would be Fire Eye, (FEYE) or Palo Alto Networks, (PANW) and not Symantec .  Still, for the fast money crowd committed to equities, it was better to find a carcass than to hang on for the ride.

In the meantime, the Russell 2000 index still enjoys a wonderful rally (see chart), having made a series of higher lows. If this area of support does not hold, there is a chance of testing the bottom of the channel, which would be an even greater test. This is not the just deserts of even the master of the market shaking out small investors, but it is overdue and unpleasant. I continue to think panic is the wrong move in general, even if the pros are racing for the exit.