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Market Hesitation, Dividends, and the Fall Catalyst


Following the Summer Surprise, the Fall Catalyst of new all-time highs seems likely, but only if we get past this period of market hesitation.


Generally, when the trend is up for this ratio, it coincides with a corrective period as money flocks to the "safety" of lower beta, higher dividend-yielding sectors of the market. When the ratio trends down, it means money is favoring capital appreciation and higher beta names. I've drawn in a horizontal line to show that we are near a rough support line favoring dividend stocks, and to illustrate the strength that has occurred in recent days. I suspect this may not be the start of another rough period for equities and that this may simply be an oversold bounce.

However, in the near-term, this could be a warning sign of a potential correction to come. If deterioration within the market does not worsen, I suspect the Fall Catalyst takes place shortly.

And yes – the next few days are crucial.

Twitter: @pensionpartners
No positions in stocks mentioned.

This writing is for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction, or as an offer to provide advisory or other services by Pension Partners, LLC in any jurisdiction in which such offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Pension Partners, LLC expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.

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