Year-end rallies not a 'birth right': Carter Worth

Small-cap stocks got off to a rough start this week, with the Russell 2000 index closing down nearly 2 percent. And according to one highly regarded technician, there's more pain ahead for the index of small-cap stocks, and that could spell trouble for stocks.

"It's almost a foregone conclusion that you get a year-end rally, it's like a birth right in America and that's just not the case," Cornerstone Marco's Carter Worth said on CNBC's "Fast Money."

According to Worth, the Russell 2000 performance is a clear indication that a year-end rally may not be coming for stocks. The index is basically unchanged on a two-year basis, trading up or down in a nearly 30 percent range. "Both results are not desirable risk rewards," he said.

Small-cap stocks are on the verge of doing something they haven't done in years, according to Worth. For December, the Russell 2000 has outperformed the S&P 500 Index 67 percent of the time since 1979. However, investors are seeing a completely different story this year, with the Russell 2000 down 2.85 percent in comparison to the S&P 500, which is down 1.45 percent in December.

"So things that are supposed to be, don't have to be," said Worth.

Small-cap stocks have rallied 157 percent from the lows of 2009. And according to Worth's chart work, the index should retreat and find support at its long-term uptrend, a decline of "6.5 percent to 7 percent move from here," said Worth.