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<h2>Measuring bellwether leadership...</h2>
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<p>Historically, there are certain stocks that have reliably led the broad market averages at major market tops. These stocks tend to lead for a variety of reasons, including sensitivity to interest rates, underlying economic conditions, or consumer spending.  In order to capture the potent signals from these stocks in the lead up to a bear market, we compiled them into a composite known as the InvesTech Bellwether Index.</p>
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<p>Underperformance in our Bellwether Index relative to the S&amp;P 500 Index is often an important warning flag that either a steep correction or a bear market lies in wait.&nbsp;Negative divergences in this Index can be clearly seen prior to the popping of the Tech Bubble in 2000 and the Great Recession in 2008.&nbsp;While absolute divergences in this index serve as potent warning flags, relative underperformance in this tool versus the S&amp;P 500 is also reason for caution. Our Bellwether Index significantly trailed the broader market prior to both the 1987 Crash and 2020 Covid Crash, which generated critical bear market warning flags even though the index was near new highs on an absolute basis. Given the historical reliability of both absolute and relative divergences in the Bellwether Index, investors should take these divergences seriously when they appear in the future.</p>
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