A different yield curve to watch

When the spread (or yield curve) of the U.S. 5 year government bond yield <minus> 3 month yield is overbought on a Weekly RSI, it closely (and tactically) signals a peak in the S&P 500.

The S&P 500 is not a peak at the moment. Buyers of put options and callers of an equity crash perhaps take note!

There were two exceptions in 2013 when this wasn’t the case. I’ll look into this a little later.

Incidentally, an Oversold yield curve isn’t an inversely reliable timing indicator.

September 11, 2022

by Rob Zdravevski

rob@karriasset.com.au