ES / CONTEXT Update

Yesterday our own individual leading indicators / risk assets that are more detailed than CONTEXT were showing what had been previous strength earlier in the week fading off and in to weakness and negative divergences. CONTEXT is an amalgamation of these risk assets rolled up in to one model of what would be considered, "Fair price" for ES, based on how the model's assets are trading and their correlation with ES. We can have ES trading much differently because it is being manipulated or we can have ES trading normally, but the assets that make up the model trading very differently, one thing that is fairly common is that when there's a large diversion away from the mean, it almost always snaps back, but first usually overshoots in the opposite direction.

Here are the charts...

 3C seems to have called all of the ES moves accurately in pre-market from a negative divergence to a positive around the ECB comments to trading in line or confirmation at the green arrow to a new negative divergence.

The CONTEXT model went from the model being positive earlier in the week to the two being pretty close to each other and vacillating slightly above or below the fair value middle line to turning to a deep negative dislocation of the model, suggesting the assets in the model that normally rally with ES are heading in the opposite direction and Es should soon follow.