Thursday, May 8, 2014

DVY Dividend ETF Weekly Chart Dividend Stock Bubble

The DVY and SDY charts have been highlighted over the last few weeks and months. DLN is another chart you can study. Analysts and traders are telling Ma and Pa to buy dividend stocks so that is what they are doing. The small cap, momo, high-flyer and tech stocks were sold off yesterday with that money moving into blue chip dividend stocks. The utilities are outperforming this year as traders chase dividends with perceived safety. Aunt Ethel and Uncle Charlie just took their entire life savings and placed it into DVY yesterday. Everyone running to the perceived safety and defense-style play of dividends is going to be disappointed as the year plays out.

All that said, the latest upside move in dividend stocks, caused by the movement of money out of high-flyers into blue chips, creates some near term bull juice (short green lines for indicators). This creates the desire for price to want to explore new highs over the next couple weeks. The bulls keep finding ways to boost the upside and grow the dividend stock bubble larger. The move from under 50 to 75, +50% is a strong run. The tight standard deviation bands in February squeezed the current move higher. A move back to the middle band at 71.50 and rising should be expected. The buying volume remains uninspiring.

Projection is for the dividend stock bubble to top out in the coming weeks, at any time forward, and for sideways to sideways lower behavior to occur through the end of the year. The chart is likely printing a multi-year top just as would be expected with the major indexes expected to top out any time now through June. A 3% dividend will not appear that attractive if the capital price depreciation is -10%, -15%, -20% or more. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

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