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The Russell 2000 index of small-cap stocks is nearing a correction defined as a 10% decline from recent highs.

In the case of the %Russell2000, it briefly entered a correction in recent days after dropping 10% from its 52-week high of 2,449.86 reached in late November of last year following the U.S. presidential election.

However, the index comprised of stocks with market capitalizations of less than $10 billion U.S. rebounded 2% on January 15 amid a broader rally in equities after U.S. inflation data came in better than expected.

Still, analysts see worrying signs in the Russell 2000. The index is close to falling below its 200-day moving average of 2,166.80, according to Dow Jones Market Data.

The index hasn’t finished trading below its 200-day moving average since Nov. 30, 2023.

The index has managed to close above its 200-day moving average for nearly 280 consecutive trading days, marking the longest such stretch since 2017.

Should the Russell 2000 finish trading below its 200-day moving average, it would represent a major breakdown for the index.

In the past, whenever the Russell 2000 has broken down below its 200-day moving average, the index has declined 2% the following month.

Despite some short bursts of activity, small-cap stocks continue to underperform large caps in the current market.

In fact, small-cap stocks have underperformed large-cap stocks for the better part of the last decade, the longest stretch on record.