A pullback for stocks could be on the horizon after a unique technical signal was flashed, BTIG said. Last week, the tech-heavy Nasdaq 100 closed less than 5% below a 52-week high, while the small cap Russell 2000 index closed less than 5% above a 52-week low — an occurrence BTIG called “extremely rare.” The Russell 2000 ended last week down 3.2%, while the Nasdaq 100 gained 2.9%. Historically, this extreme bifurcation hasn’t been good for the market. BTIG chief market technician Jonathan Krinsky pointed out there have been just seven other occasions since 1985 that such a divergence has been seen. Eight weeks following this signal flashing, the Nasdaq 100 and Russell 2000 have lost 4.1% and 6.7%, respectively, on a median basis. “This is often a sign of crowding as the NDX is a cap-weighted index of just 100 large-cap names, while the RTY is more equally weighted of 2k smaller companies,” Krinsky wrote. This divergence also took place in 2022 and 2007 — before the start of two bear markets. Both indexes were down sharply in the following two months. To be sure, it was last seen on May 2 — and the Nasdaq 100 and Russell 2000 were up 13.9% and 8.6%, respectively, eight weeks after. Krinsky added that the American Association of Individual Investors Bears sentiment survey just saw its largest one-week drop since 2003. ” Our view remains that this bear is not yet over, and therefore this drop in bearish sentiment is a negative sign,” the analyst said. This comes as some investors on Wall Street are concerned about the market’s narrow leadership this year, with just the “Magnificent Seven ” tech stocks scooping up outsized gains compared to the rest of the names in the S & P 500 . It may be a sign that the market is reaching a near-term inflection point. — CNBC’s Michael Bloom contributed reporting.