A leading recessionary indicator is flashing red, but investors don’t appear to care ... yet

The yield curve narrowed to its flattest level since before the financial crisis this week.

The difference between the 2-year and 10-year yield fell to below 24 basis points on an intraday basis Thursday morning, the flattest level since August 2007, two months before the S&P 500 began a steep descent to crisis lows.

But any worries a flatter yield curve spells the end of this bull run are premature, says one market watcher.

"The yield curve is rather flat but a flat yield curve is not a message that the rally is over. An inverted yield curve is and we're just not there yet," Mark Tepper, president of Strategic Wealth Partners, told CNBC's "Trading Nation" on Thursday.

An inverted yield curve occurs when shorter-term Treasurys such as 2-year bonds have a higher yield than longer-term Treasurys such as the 10-year note. It is typically seen as a leading indicator of trouble with the economy and stock market.

The yield curve has correctly predicted each of the past seven recessions since 1968, says Tepper. However, a long lead time means this nine-year bull market could have more room to run yet.

"As a stand-alone indicator, it's typically just way early, way premature. It signals the onset of a recession by an average of about 12 months too early and six months before stocks peak," added Tepper.

On average, stocks rise another 15 to 16 percent in the 18 months after the yield curve inverts, according to Credit Suisse.

Bill Baruch, president of Blue Line Futures, sees the yield curve getting flatter but does not expect it to stand in the way of more stock gains.

"I am not bearish the equity market. I think equities will make new highs," Baruch said Thursday on "Trading Nation." "The S&P very soon will set off a new all-time high, and I think November and December could be very strong months into January for the market."

The S&P 500 and Dow last set record highs in late January. The S&P 500 is 1 percent from its all-time intraday high, while the Dow needs to add 1,085 points more to get back to its own.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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