Dividend Appreciation Fund Has Achieved 7 Up Days In A Row

Scanning through major ETFs, one that sticks out for its recent trend is VIG, the Vanguard Dividend Appreciation fund. It tracks US stocks with a history of consistently raising its dividend.

The fund has now risen for 7 straight days (on track for 8 as I type). It has managed to accomplish this six other times in the past 5 years, as shown below.

Four of those preceded short- to intermediate-term weakness as the buying thrust relaxed. The two others led to persistent upside. One big difference between now and all the others is the major trend. The 200-day average of VIG has flattened.

One thing we're always watching for are times when sentiment has swung to an extreme in a flat market, or counter to the trend (i.e. optimism in a neutral or generally negative market).

An argument could be made that VIG is emerging from intermediate-term oversold conditions, and thus the streak of up days is a kick-off move most likely to continue. But it's been a couple of months since the low. We're more inclined to consider this exhaustive behavior most likely to lead to at least a shorter-term pullback.