Thread by @NickSchmidt_

By the time the S&P 500 confirms a trend, it’s too late.

The market already told you where it was going.

If you know where to look, you’ll always be ahead. 🧵

First, the market controls everything.

O’Neil found that 3 out of 4 stocks follow the market’s trend.

If you trade against the overall market, your odds of success drop dramatically.

But leading stocks will reveal the trend before the indexes do.

The best stocks only thrive in a strong market. Even a perfect breakout setup can fail if the broader market is weak.

But instead of waiting for the indexes, watch individual stocks. They move first.

STOCKS LEAD, INDEXES FOLLOW:

• When leaders surge on big volume, the market is strengthening.
• When leaders break down while the index looks fine, trouble is ahead.

Stocks tell the story first.

WHAT TO WATCH IN LEADING STOCKS:

Forget the news. Focus on price action.

• Strong signs: Stocks breaking out and holding gains on heavy volume.
• Warning signs: Breakouts failing, leaders selling off before the indexes turn red.

If leaders struggle, the index will follow.

Take a look at $SPY & $NVDA early this year.

While $NVDA was making lower highs, $SPY made a new high, before rolling over.

@Deepvue WHAT HAPPENS IN A HEALTHY MARKET?

• Stocks move up on strong volume.
• Breakouts work and follow through.
• Leading stocks form proper bases.

Good stocks act right before the index confirms the trend.

HOW STOCKS WARN OF A TOP:

A market top doesn’t start with the index. It starts with stocks breaking down.

• Leading stocks hit new highs, then fail.
• Distribution creeps in: sharp sell-offs on big volume.
• Breakouts stop working.

These are your early exit signals.

Take a look at 2 prior leaders $HIMS & $APP. Both hit new highs and were sold.

@Deepvue HOW TO SPOT A TRUE MARKET BOTTOM:

Just like tops, stocks also signal bottoms before indexes recover.

• Leaders stop making new lows and start building bases.
• A few stocks break out and actually hold gains.
• The best stocks move up before the index confirms a rally.

WHY INDEXES ALONE ARE MISLEADING:

Many traders wait for the S&P 500 or Nasdaq to confirm a trend. But by then, you’ve missed the best entries.

The real edge comes from spotting the next leaders early, before the index catches up.

STOCKS ARE THE BEST MARKET INDICATOR:

Instead of reacting to the index, let stocks guide you.

• When breakouts work, add exposure.
• When stocks act weak, reduce risk, no matter what the index says.

The best traders trust stocks first.

Forget the headlines. Forget the noise.

Leading stocks move first. The index follows.

Train your eye to spot the trend changes in leading stocks early, and you'll always be ahead.

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