For the first time since the 2020 COVID-19 Crash, our Negative Leadership Composite (NLC) has started showing bearish Distribution. Although the S&P 500 is less than -4% below its all-time high set on November 18, downside market leadership has become much more pronounced in recent weeks leading to an initial Distribution reading of -5. While the onset of Distribution does not necessarily mean a bear market is imminent, it does represent a shot across the bow for this technical bull market.
In the upcoming issue of InvesTech Research, we will explore what the appearance of Distribution has historically meant for the equity market as well as how to utilize this proprietary indicator if leadership continues to deteriorate.
As a reminder, we will send an email notification whenever we make changes to the Model Fund Portfolio. This email will direct you to the Model Fund Portfolio page of our website, where you will find information about the specific adjustments as well as an overview of portfolio positioning.
