Not confirmed via a bearish crossover at a lower level than the previous peak but both the MACD & PPO are significantly lagging (diverging) on the 60-minute charts so we have pretty strong (pronounced) albeit unconfirmed negative divergences on the 60-min charts of all the major stock indices (IWM, MDY, SPY, QQQ, etc..)

Smallies will ultimately follow the lg caps so if the tag of that 330 resistance on QQQ today proves to be the final resting place for the rally off the mid-June lows then the Q’s will drag down the R2K kicking & screaming.

Of course, the (roughly) intersecting downtrend, 200-day EMA, & 330 price resistance on QQQ is only the bottom of my max. bounce target range which runs up to the 200-day SMA which comes in just over 3% above today’s high. No guarantees that if we get there that it will be an end-point for the rally but if so, then we’ll most likely see a little more upside on IWM/RTY so have your stops commensurate with your price target(s) on /RTY.

If you’re feeling pain on the trade (keeping you up at night) then consider setting a tight stop just above today’s high. If they take you out, you can always re-enter at the next high probability entry. I have to say that the fact the recent breakdowns/sell signals on QQQ & IWM last week only played out for relatively small drops before being aggressively bought up shows there are still more buyers than sellers at this time although that can & will change at some point sooner or later.

One thing about the larger bear market rallies is that they usually don’t end until the masses are convinced that the bear market is over & it’s finally safe to get back into the water. As I said a week or so ago, there’s a good chance this market may grind around for a few weeks+ as it puts in a top if so that’s going to frustrate both longs & shorts alike.