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At the beginning of the year, the benchmark index for government bonds in Iceland - NOMXIBB - made new all-time highs and has kept rising with no clear top in sight.

NOMXIBB – Weekly Chart

Meanwhile, the OMX Iceland All-Share Price Index (OMXIPI) is still in a long-term downtrend but possibly in a trend reversal process. The stock index has been underperforming the bond index since early 2022, as can be seen in the indicator in the lower window of the chart below. For a sustainable rise in OMXIPI, it needs to start doing better than the NOMXIBB by reversing the relative performance trend from down to up.

OMXIPI – Weekly Chart

On the monthly chart of the OMXIPI, my very long-term Sentiment Swing Indicator (SSI) has been rising under the zero line in recent months and triggered a “buy” signal in January of this year. It must be confirmed with convincing price action in the coming weeks and months.

OMXIPI – Monthly Chart

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