And here is the 'ratio chart' of the small cap ETF:IWM/large cap SPY. You can see from early Feb the small caps have been underperforming the large caps. As soon as this seems apparent or likely with whatever you are using to spot weakness in the broad market you can put on a SPY/IWM spread trade which is long SPY that is still hitting new highs and short IWM which will work in the broad market rally that is occurring and really work well in the selloff that you see coming both as a selloff will typically see the small caps fall harder and underperform SPY. Already this spread which would be short IWM and long SPY has made good gains even with the SPY making new highs. After a selloff if your indicators suggest a bottom you would likely see the IWM hold up better and begin to outperform the SPY. Then you would exit that short trade and buy a long small caps/short SPY spread trade which is IWM/SPY as the small caps would likely outperform the large caps once again. Lots of ways to do this. But this ratio does give a heads up on strength or weakness in the broad market with lots of ways to trade it. At the bottom of a major selloff one can just buy the single long small cap IWM or be bolder and buy the double bull ETF:UWM or really go all out and buy the triple bull ETF: TNA. But again the double and triple that are calculated daily do have a downward bias to them to be concerned about. But at the end of a major selloff the rally back is often strong enough to overcome that as long as you don't hold it expecting the moon.