Everybody loves their divvy. Everyone is brainwashed into the divvy compounding cult going forward. Investors puff their chests out as they proclaim, "I only buy dividend-producing stocks." Divvy, divvy, divvy, you get dizzy, I'm so dizzy my head is spinning, I'm so dizzy, I can't see. Tommy Roe.
Like Pavlov's dog, any time someone hears the word dividend they hit the buy, buy, buy button without thinking twice. There are likely lots of young folks in dividend-producing stocks looking forward to gaining wealth and compounding price upside and dividends. So is a lot of other people. In fact the chart above shows everyone and his bro are into dividend stocks with the same idea. All the folks chasing dividend stocks are slapping each other on the back proclaiming how smart they are for owning the big dividend producers (bloated behemoths).
Going forward in America, the coming decades will not be like prior decades. The population was increasing into the new century driving stock markets higher. More people, production and wealth was the steady path ahead, until now, when young folks cannot afford to have families anymore. The US is on the downside of the baby boomer stuff.
Baby boomers that have lots of bucks in stocks will pull that out as they pay for their health problems and continue to help their adult children that cannot support themselves. A young person working as a barista at Starbucks is not going to step in and buy the stock that the older folks are cashing-out. Think about the demographics going forward before listening to the talking heads on television and the internet that have one arm around your shoulder like your best friend, but the other hand is reaching in your back pocket.
Anyhoo, DVY price prints a higher high and another touch of the bearish rising wedge pattern. The chart indicators are all negatively diverged so DVY is cooked. Crispy-fried. Stick a fork in it. The top is in and a multi-week pullback should begin, and this week is the first week of pulling back as the red candlestick shows.
Interestingly, the chart was already neggie d at the start of October, and it received a spankdown, but it recovered. That was due to the Fed rate cut talk and AI hype and other happy talk. It is odd. There was no reason for DVY to come back up for a higher high after the October top, but it did. And look how drastically lower the chart indicators are now; completely out of gas and neggie d.
The bottom rail of the rising red wedge is in play as support; price stopped there today at 142 to sit on the rail and make a bounce or die decision tomorrow. Below is the 20-wk MA at 139 that served as support over the last couple months. If she fails, the rout will be on and all of you divvy chasers will be running for your lives losing your money. That will be fun to watch. The 137-ish is strong price support and another downside target.
The drops from rising wedge patterns can be quite dramatic so if you are long divvy stocks, and start to see price drop, you may want to begin clenching your buttocks.
The move higher in late 2024 was a strong trend higher as the pink box for the ADX shows but despite higher prices over the last year, the move higher is not considered a strong trend higher. The Aroon green line shows that nearly every DVY bull remains bullish expecting the stock to go up forever. Comically, the red line shows that nearly every DVY bear also believes that the stock will go up forever. Everyone is on the DVY bull side of the boat as the craft begins swaying and rocking to and fro.
If you own a lot of dividend-producing stocks such as MO, F, STX, VZ, PFE, EIX, ES, KEY, ADM and D, you are about to have a religious experience to end the year. That is appropriate considering the time of year. Bend over and assume the position. Keystone is not playing DVY long or short right now but the preferred play going forward would be to short DVY.
Hold on, let's check the shorter term charts for clues or to help with the timing if you want to go short. Wow. That is cool. On the DVY daily chart, you can see a megaphone pattern, or expansion pattern, plain as day. She tapped the top rail of the megaphone 5 days ago so the moive down to the bottom of the expansion pattern would be..... wait for it ...... wait a bit longer ..... 137-ish. The DVY started receiving the neggie d spankdown on Monday. DVY should remain soggy and drop lower and lower for a few weeks perhaps through the end of the year. DVY may drop sharply from the rising wedge any day forward.
Do you like divvy stocks? Did you always feel smart because you owned them? Assume the position. The hippest Christmas song. Run Run Rudolph. 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.


















