Many times we can see two leading stocks or ETF’s telling a different story. Therefore, one may be trading higher and the other could be trading negative. How do we know which one is talking to us. While it is not easy to differentiate between the two just watch the major indexes. When the major indexes react with the leading stock or ETF then that is the leader. In the example below we have XOM, and the OIH(oil services holders trust ETF). Clearly XOM is the stronger and more important of the two. XOM is one of the biggest market cap stocks and seems to move the market. Many would have suspected the OIH would be more important because it has many stocks in it’s basket. However, XOM is clearly the bigger market mover. Remember it is important to find the stocks that move markets in order to know when the indexes are going to bounce or decline.