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. 

How The Recent Decline In Stocks Looks "Eerily" Like Major Bear Markets Of The Past