ES NQ Spread EMA Cloud Momentum

Relative Momentum Filter ES (vs NQ)
🎯 Indicator Purpose

This indicator is not an entry signal.
Its purpose is to identify phases where the S&P 500 (ES) becomes relatively stronger or weaker than the Nasdaq (NQ), in order to filter trades in the correct direction.

It is especially suited for scalping and intraday trading, as a complement to tools such as VWAP, price structure, or footprint.

🔍 General Principle

The indicator calculates an ES–NQ spread, then analyzes:

relative strength (ES vs NQ)

changes in relative momentum

Two exponential moving averages are used:

EMA 20: active relative momentum

EMA 40: short-term relative context

The position of EMA 20 relative to the zero level indicates whether ES is structurally strong or weak compared to NQ.

☁️ Context Cloud (Directional Bias)

A colored cloud appears between the two EMAs to define the allowed directional bias:

🟢 Green Cloud (Long ES bias)

EMA 20 < 0

EMA 20 > EMA 40
→ ES was relatively weak and is starting to strengthen

🔴 Red Cloud (Short ES bias)

EMA 20 > 0

EMA 20 < EMA 40
→ ES was relatively strong and is starting to weaken

When no cloud is present, the context is neutral.

🎯 Momentum Confirmation (Green / Red Background)

A colored background appears only when relative momentum is confirmed:

🟢 Green Background

long bias active

the spread moves back below the EMA zone
→ momentum resumes in favor of ES longs

🔴 Red Background

short bias active

the spread moves back above the EMA zone
→ momentum resumes in favor of ES shorts

These areas highlight moments of interest to look for a setup on ES, not automatic trade entries.

🔔 TradingView Alerts

The indicator includes:

one LONG alert

one SHORT alert

Each alert can be manually enabled or disabled, for example based on the price position relative to VWAP.

⚠️ Best Practices

Use this filter only as a contextual tool

Always wait for price confirmation

Avoid trading against the indicated bias

Do not use it as a standalone system