Negative Leadership Composite

Measuring the real quality of internal leadership…

The Negative Leadership Composite (NLC) has served as one of InvesTech Research’s most reliable tools over our 40-year history for navigating bull and bear markets alike.

Selling Vacuum

The top half of our NLC, or what we call the bullish (*1) Selling Vacuum, rises as downside leadership evaporates. More often than not, the height and duration of this Selling Vacuum helps to indicate how strong a new bull market is – and how long it will last. For example, the instances when this indicator has climbed to very strong readings of +60 or +70, it confirmed the onset of a new multi-year bull market.

Distribution

The bottom (shaded) half of our NLC, also known as bearish (*2) Distribution, measures the rate of acceleration in downside leadership. This is the most vulnerable, dangerous region for the stock market… it is when bear markets can strike.

Obviously, this Negative Leadership Composite doesn’t provide signals very often. When Distribution (shaded region) is present, it’s time to be more cautious and carry a higher cash reserve. But when a Selling Vacuum appears (especially after 6+ months of Distribution), it’s time to take notice and get ready to jump on a charging new bull market in stocks.

Log Scale Updated: Feb 06, 2026 50 75 100 150 200 300 400 600 800 1000 1200 1500 2000 2500 3000 4000 5500 8000 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 24 26 S&P 500 SELLING VACUUM (very bullish) *1 0 10 20 30 40 50 60 70 80 InvesTech Negative Leadership Composite 0 -50 -100 50 75 100 150 200 300 400 600 800 1000 1200 1500 2000 2500 3000 4000 5500 8000 50 75 100 150 200 300 400 600 800 1000 1200 1500 2000 2500 3000 4000 5500 8000 50 75 100 150 200 300 400 600 800 1000 1200 1500 2000 2500 3000 4000 5500 8000 1966-01-01 1967-01-01 1968-01-01 1969-01-01 1970-01-01 1971-01-01 1972-01-01 1973-01-01 1974-01-01 1975-01-01 1976-01-01 1977-01-01 1978-01-01 1979-01-01 1980-01-01 1981-01-01 1982-01-01 1983-01-01 1984-01-01 1985-01-01 1986-01-01 1987-01-01 1988-01-01 1989-01-01 1990-01-01 1991-01-01 1992-01-01 1993-01-01 1994-01-01 1995-01-01 1996-01-01 1997-01-01 1998-01-01 1999-01-01 2000-01-01 2001-01-01 2002-01-01 2003-01-01 2004-01-01 2005-01-01 2006-01-01 2007-01-01 2008-01-01 2009-01-01 2010-01-01 2011-01-01 2012-01-01 2013-01-01 2014-01-01 2015-01-01 2016-01-01 2017-01-01 2018-01-01 2019-01-01 2020-01-01 2021-01-01 2022-01-01 2023-01-01 2024-01-01 2025-01-01 2026-01-01 S&P 500 0 20 40 60 80 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 24 26 InvesTech Negative Leadership Composite 0 -50 -100 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 24 26 DISTRIBUTION (high danger) 2* +2 InvesTech Negative Leadership Composite