← Learning HubLesson 2NQ · ES · YMConfluence
Using the Dow Jones (YM), S&P 500 (ES), and Nasdaq-100 (NQ) together to filter ORB entries and predict the market's directional move.
Why Three Indices?
The NQ, ES, and YM represent different compositions of the US equity market. Their behavior at the opening range tells you something about who is driving the move:
Key insight: When all three indices agree on direction at the open, you have broad market consensus. When they diverge, it signals rotation — money moving between sectors — which makes directional breakouts less reliable.
The Three-Index ORB Filter
Before executing any NQ ORB trade, check the opening range status on all three:
Scenario A: Full Confirmation (All Three Agree)
NQ breaks OR High AND ES breaks OR High AND YM breaks OR High
Interpretation: broad institutional buying across all sectors
Action: Full-size position, standard targets
Scenario B: Partial Confirmation (Two of Three)
NQ and ES break OR High, but YM stalls inside its OR
Interpretation: growth/tech leading, value lagging — rotation day possible
NQ breaks OR High but ES breaks OR Low (or vice versa)
Interpretation: strong sector rotation or macro confusion
Action: No trade — sit on hands until clarity emerges
Scenario A (full confirmation) vs. divergence. Only trade the ORB when at least two of three indices confirm.
Reading the Relative Strength
Beyond simple "break or no break," the speed and magnitude of each index's move tells you about conviction:
Signal
Interpretation
Action
NQ leading (breaking first, fastest)
Tech/growth driving the move; risk-on
Trade NQ (your edge is in the leader)
ES leading, NQ lagging
Broad market strength but tech cautious
Consider ES trade instead, or wait for NQ to catch up
YM leading, NQ lagging
Value/defensive rotation; NQ may not follow
Avoid NQ long; the rotation may cap tech upside
NQ breaking out, YM breaking down
Extreme rotation — fragile move
No trade — this divergence often reverses
Pre-Market Alignment Check
Before 9:30, assess where each futures contract is trading relative to the prior session's close:
Gap direction — are all three gapping the same way? (bullish/bearish consensus from overnight)
Pre-market range — has one index already moved significantly more than the others? (potential exhaustion)
Overnight high/low — if the OR forms near the overnight high/low of ALL three indices, the breakout level has multi-timeframe significance
Watch out: On days with significant overnight news (earnings from mega-cap tech like AAPL/NVDA/MSFT), NQ may gap far more than ES/YM. A large NQ gap with flat ES/YM means the move is concentrated in a few names — the ORB may be less reliable because the broader market isn't participating.
Practical Workflow
Here's the screen setup for trading the multi-index ORB:
Chart 1 (primary): NQ 1-min or 5-min with OR High/Low marked
Chart 2: ES 5-min with OR High/Low marked
Chart 3: YM 5-min with OR High/Low marked
Checklist at 9:45:
☐ NQ OR High/Low defined
☐ ES OR High/Low defined
☐ YM OR High/Low defined
☐ Gap direction aligned? (Y/N)
☐ OR width within normal range? (Y/N)
Wait for breakout — first index to break triggers alertness; second confirms; third = green light
Predicting the Move: Which Way Will It Break?
The multi-index framework doesn't just confirm breakouts — it can predict direction before 9:45:
If all three gap up and hold gains into 9:30 — bias long ORB. Buyers absorbed overnight selling pressure.
If NQ gaps up but ES/YM are flat or red — caution on NQ long. The broad market isn't supporting the tech bid.
If all three are compressing into tight pre-market ranges — expect a large breakout (energy building), but direction is 50/50 until it happens.
If YM is strong but NQ is weak — defensive rotation. Bias short on NQ ORB if the pattern continues post-open.
Knowledge Check
Quiz 1
NQ breaks above its OR High, ES breaks above its OR High, but YM is stuck inside its opening range. What's the appropriate action?
Take a full-size long position on NQ immediately
Take a reduced-size long on NQ with tighter stops
Short NQ because divergence means reversal is coming
Wait for YM to break down before taking any trade
Quiz 2
Pre-market, NQ is up 1.5% but ES and YM are flat. What does this signal about a potential NQ long ORB?
NQ is strongest so it's the best long candidate today
The market is bullish overall and NQ is leading the move
The NQ move is narrow (few stocks) and may lack support
This pattern has no predictive value for the ORB strategy
Primary Source to Study
📖 Recommended: CME Group — Introduction to Equity Index Products
Understand the contract specifications, correlations, and composition differences between NQ, ES, and YM. This gives you the factual foundation for why inter-market analysis works — these contracts are traded by the same institutions simultaneously.