It is the difference between the S&P 500 ( SPY ) and the Russell 2000 ( IWM ), essentially the gap between mid-cap to large-cap and small-cap stocks. Why is this chart so relevant? Because small-caps are always the first to fall in times of major correction or bear market.
In 2007, we reached a top of 70 points in difference, which meant that small-cap were starting to fall. We are at the exact same as of right now! With the correction we have seen on Nasdaq and Russell and with this chart confirming a large difference with the S&P 500 it can lead to thinking that it is due to fall as well.
We'll see what happens, but this is slightly worrying if you're long S&P .