Inserted above is a chart which shows the last few interest rate cycles (10-Yr/2-Yr Treasury Spread) relative to the S&P500.  Note how the interest rate cycle bottoms coincide with tops in equities.  ZIRP is distorting the short end of the Treasury curve so absent a 2008-type panic it’s darn near impossible to get the yield curve any flatter (ie, the spread any tighter/lower).  While Fly and others watch for rising interest rates on the long end of the curve (ie, lower TLT) as a sign that equities are headed higher, the widening of the spread via higher rates on the long-end hasn’t in the past traditionally portended higher equities.