The iShares Russell 2000 (NYSEArca: IWM) rose to a new all-time high on Tuesday before pulling back somewhat in afternoon trading.

The U.S. small-cap index logged another record price level with the CBOE Volatility Index lingering near lows last seen in 2007. [Small-Cap ETF Nearly Doubles S&P 500 Gain]

“Complacency is at its highest level since mid-2007, another compelling reason for caution. The CBOE Volatility Index (VIX) is notably low as it trades at the bottom of a four year range; a sharp bounce back is inevitable, a move which would accompany a violent equity sell-off,” said Tarquin Coe, technical analyst at Investors Intelligence, in a note this week.

“Furthermore, news last week that net inflows to equity funds were at $22.2 billion in the week to January 9th, the highest level since September 2007; providing another strong contrarian sign that the rally is near its end,” he wrote. [Investors Bullish on Stock ETFs]

The iPath S&P 500 VIX Short Term Futures ETN (NYSEArca: VXX) fell to a fresh all-time low on Tuesday. [VIX Drops to 2007 Levels]

CBOE Volatility Index

Full disclosure: Tom Lydon’s clients own IWM.

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