IWM offers an objective short entry on this bounce back to the 197ish resistance level with stops somewhat above. Min. pullback target 193 with the potential for more, should the breakout in the large caps fail soon. 60-minute chart below.
IWM 60m Jan 22nd
Likewise, /RTY (Russell 2000 Small-cap futures) offers an objective short entry on this rally into the 2000ish resistance with stops somewhat above, ideally on a 120-minute or daily closing basis. 120-minute chart below.
RTY 120m Jan 22nd
As with any trade, I can’t guarantee this one will pan out but I can say with conviction that shorting a rally into resistance with stops somewhat above is objective but again, whether & by how much the small-caps drop from here will likely depend on how much longer the breakout on the large-caps sticks.
Another factor for the small-caps is the rate on the 10-yr Treasury bond, as small-caps stocks are more sensitive to rising & falling rates than large cap stocks. Additionally, the stock market remains highly correlated to EUR/USD and as such, continued upside in the stock market will likely coincide with a lift in EUR/USD which would likely translate into a rally in the (also correlated) precious metals & miners. As such, longs on the other asset classes that are positively correlated to the Euro (i.e.- negatively correlated to $USD) are likely (not guaranteed but likely) to be effective as indirect hedges to any stock index shorts.