From a yield perspective, the S&P 500 is a screaming long term buy: S&P 500 Earnings Yield vs. Treasury-Bill Yield Description | Calculation | Strategy | View Chart Time Frame: Long Category: Fundamental Description The S&P Earnings Yield is the prior 12 months' earnings of the S&P 500 Index as a percentage of its cash price. This is a method of establishing a measure of valuation for the actual earnings generated by the market. A higher earnings yield suggests the market is at a better fundamentally valued level than a lower earnings yield. This indicator calculates this fundamental value relative to monetary investments to create a measure of the relative attractiveness of holding stocks versus fixed income instruments. Calculation & Significant Levels S&P 500 Earnings Yield vs. T-Bill Yield: Three-month T-Bill yield divided by the S&P 500 Earnings Yield. Above 1.1 is considered bearish and below .9 is bullish. Formula: (T-Bill Yield) ------------------------------------------- (S&P 500 Earnings) / (S&P cash index price) Gauge Elements: Magnitude Updated: Weekly (as of Friday close) Strategy Historically, when the ratio of the T-Bill yield divided by the S&P 500 earnings yield has risen above 1.1 it has been a noteworthy warning that the market was vulnerable to a correction. When this indicator has been below .9 the market has demonstrated a significant upward bias.