DYC1 and DYC2, the more volatile dividend cycles, not only refute the bears' bubble claims but also suggest that stocks are closer to oversold than overbought (chart 1). Forecasts of a 4,000 point decline in the DOW, growing risk of a major top, or sell everything! will be forgotten when extreme negative concentration from DYC1 to DYC4 tighten risk management and/or trigger short positions against what will likely be raging optimism towards US Stocks by the majority (chart 1 and 2).
Headline: The stage is set for the next 10% plunge in stocks
The stock market (^GSPC) continues to trend higher as earnings growth remains lackluster. This has caused valuations to get very expensive, signaling a stock market that’s becoming increasingly due for a sharp sell-off.
Everyone is flagging this anxiety-inducing pattern, and yet the market continues to rally arguably nonsensically.
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