When Generals Run and Soldiers Nap — The Market’s Odd Parade

Ever seen an army march where the generals sprint ahead, but the soldiers just yawn and stay behind?
That’s exactly what’s happening in the U.S. futures battlefield right now.

The ES, NQ, and YM — our large-cap “generals” — opened the week above their prior highs, looking ready for victory speeches. But the RTY, representing small caps, is still lagging like it hit the snooze button.

The Breadth Problem

Healthy rallies need everyone on board. When small caps don’t join the charge, it’s like running a marathon with only one leg — you might move forward, but not for long.
That’s why this gap between the big guys and the small ones is called bearish divergence — momentum without muscle.

How Deep Could It Go?

Under the surface, liquidity pockets (UFO supports) show the “landing zones” below price:

• ES: ~5% lower
  
• NQ: ~6% lower
  
• YM: ~9% lower
  
• RTY: ~14% lower (!)
  

Translation: if the market trips, the generals may bruise a knee — but the soldiers could roll down the hill.

Tick, Margin, and Scale

CME index futures come in two flavors — E-minis for the pros, Micro E-minis for precision control:

• S&P 500 (ES/MES): tick 0.25 → $12.50 / $1.25; margin ≈ $21K / $2.1K
  
• Nasdaq 100 (NQ/MNQ): tick 0.25 → $5 / $0.50; margin ≈ $30K / $3K
  
• Dow Jones (YM/MYM): tick 1 → $5 / $0.50; margin ≈ $13K / $1.3K
  
• Russell 2000 (RTY/M2K): tick 0.10 → $5 / $0.50; margin ≈ $9K / $0.9K
  

(Approximate numbers, educational only.)

The Lesson

Breadth divergences don’t “predict” the end of the rally — they just whisper: “Careful, this parade’s out of sync.”

So before chasing the next breakout, remember:
even the best generals can’t win a war if their soldiers stay in camp.

Want More Depth?

If you’d like to go deeper into the building blocks of trading, check out our From Mystery to Mastery trilogy, three cornerstone articles that complement this one:

• 🔗 From Mystery to Mastery: Trading Essentials
• 🔗 From Mystery to Mastery: Futures Explained
• 🔗 From Mystery to Mastery: Options Explained

When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: tradingview.com/cme/ - This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies.

General Disclaimer:
The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.