By Aaron Levitt, InvestorPlace Contributor In light of the Federal Reserve’s recent interest rate increase, dividend stocks have continued to take it on the chin. The prevailing idea is that investors will be able to find “safer” high-yielding alternatives than in shares of firms that pay dividends. However,
Major averages finished mixed yesterday on mixed but above average volume. China’s Shanghai Composite Index finished flat overnight as it was still unable to manage a bounce. It’s sharp downtrend remains intact so any bounce that materializes may be a shorting opportunity. The same holds true for other markets including the US markets. A major top in the US markets has formed but the question is when a more substantial bear market may take shape with averages currently off around 10% for the NASDAQ Composite, S&P 500 and DJIA. The Russell 2000 is off nearly 20%. Of course, should the Federal Reserve step in with a new form of QE, a la QE4, that could also push markets artificially higher once again. But so far, the Fed’s dot plot is for 4 rate hikes this year, so the correction could become a full-blown bear. This would clear the decks and thus be a healthy step towards a restoration of perhaps partial normality in the markets. Futures are up around 1% at the time of this writing on no particular news as the market is due for a bounce. While conditions remain weak, such a bounce may be short-lived and provide shorting opportunities in individual stocks.