$IWM, the small-cap ETF, is experiencing significant volatility and underperformance compared to $SPY, the S&P 500 ETF. It has hit century-lows relative to $SPY, struggled to rally despite rate drops, and is now flat to $SPY since inception. Traders are closely monitoring $IWM's movements, with some calling for defense of the 200 support level. The index is currently trading below $200, with small caps leading the downside. Despite attempts to fill gaps and potential intraday bounces, $IWM remains weak and is now down on the year while large caps are up. Traders are adjusting positions and strategies to navigate the challenging market conditions.