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NQ versus ES.SMT Divergence
Smart Money Technique divergence compares correlated instruments. When NQ takes out its London low but ES holds above its own, the sell-side raid was not backed by the broader market. That non-confirmation is a powerful reversal signal, especially when it lines up with a session sweep.
Why it works
Correlated markets should make matching highs and lows. When they do not, the break was engineered.
Timeframes
5m and 15m, side by side.
Session
New York session opens.
The checklist
- 1Both instruments approach the same relative level.
- 2One sweeps it, the other does not.
- 3A structure shift follows on the instrument that swept.
Execution
Entry
On the instrument that swept, after confirmation.
Stop
Beyond the divergent extreme.
Target
The nearest opposing liquidity.
When you should not take it
- Only compare genuinely correlated pairs — NQ/ES, or gold versus the dollar.
Full guide
Read the in-depth guide with examples and FAQ