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Could Russell correction signal more losses ahead?

Trader on the floor of the New York Stock Exchange.
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Trader on the floor of the New York Stock Exchange.

As U.S. investors assess the market's ongoing selloff, they may find the proverbial canary in the coal mine to be small-cap stocks, particularly those within the Russell 2000.

The Russell, a key small caps index, entered correction territory Friday, trading about 10 percent below its 52-week high of 1,296, reached June 23, according to data from FactSet.

"This is a signal that there's more trouble in the periphery," said Adam Sarhan, CEO at Sarhan Capital, adding that this fall could also signal a broader economic slowdown that could bring about another round of quantitative easing.

The Dow Jones industrial average and the Nasdaq Composite were last both down more than 8 percent off their 52-week highs on Friday, while the S&P 500 was about 6 percent below its 52-week high, and the situation may become even more dire. (Click here for the latest on the markets)

"That's how bull markets mature, and really the end, the correction really stars in the small stocks and the Russell is the poster boy of that as an index," said Peter Boockvar, chief market analyst at the Lindsey Group, to CNBC.

"It's more often than not that the bigger stocks will succumb to the weakness in the small and midcaps than the small caps catching up with the big," Boockvar added.

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Nevertheless, Alpine Funds portfolio manager Mike Smith said investors should not be overly concerned.

"We see a correction like this every few quarters," he said.

"I view this as a very common correction, and we're very close to the bottom," Smith said, adding that the CBOE Volatility Index's recent points to that.

The VIX rose more than 20 percent Friday and was on track for its biggest monthly gain since 2008.