A performance spread index was created by dividing the 30-year Government Bond and High Yields, then a moving average crossover system was applied to the performance spread to create buy and sell signals for the S&P 500 index.
As you can see in the chart, this is not an active or flawless system, yet it has helped investors capture a good deal of the rallies and it missed a good deal of the 2007-09 decline.
Currently a “Sell Signal” is in play…
Side note….the 500 index hasn’t declined much since the last sell signal, yet the performance spread continues to move higher.
