INVESTECH MODEL FUND PORTFOLIO
Thursday September 24, 2026: We recommended the following changes to our Model Fund Portfolio
InvesTech’s time-tested Negative Leadership Composite (NLC) is giving an important warning as the bearish Distribution component hit -100. As leadership deteriorated, breadth has also broken down as measured by the InvesTech A/D Divergence Index. With these important technical indicators ringing alarm bells, we are recommending the following defensive update to our Model Fund Portfolio:
- Increase the Direxion Daily S&P 500 Bear 1X ETF (Symbol: SPDN) from 5% to 8%. We are incrementally raising portfolio defenses with this S&P 500 inverse index fund. For more information about inverse index funds or to see alternative options to SPDN, please see The “Bare Necessities” About Bear Funds in the Subscriber Library.
Following this change, the Model Fund Portfolio is comprised of 62.5% long positions, 8% in an inverse index ETF, 5% in an intermediate Treasury ETF, and 24.5% cash held in short-term Treasurys or a money market fund. This results in 54.5% net equity exposure.
MACROECONOMIC UPDATE
- New Home Sales rose 6.4% in August but remain 2% below the rate of 1 year ago. The current inventory and sales rate represent 8.5 months supply of new homes. This is far above the level of a healthy housing market as sales continue to lag.
- Consumer Sentiment came in at 48.1 – the lowest level in four months. The 15% decline in the Index so far this year is largely due to concerns over rising prices, and these worries continue to worsen as inflation expectations jumped from 4.0% to 4.6% just this month.
TECHNICAL UPDATE
- Bearish Distribution in the InvesTech Negative Leadership Composite (NLC) dropped to -100 as downside leadership increased rapidly. This is an important warning that the underlying fundamentals of the market are severely deteriorating (see Market Insight).
- The InvesTech A/D Divergence Index showed significantly narrowing market breadth as it steeply dropped to -5.3%. A continued breakdown in breadth would be an important sign that a market downturn could be on its way.