The short answer is that mavg() and similar price measures don't yet know about dividends. You've hit an area of our backtester that still needs some implementation work.
The dividends section of the help doc explains a lot of the design choices we made around dividends. The downside to the design we chose is also mentioned there: dividends can cause discontinuities in the price and brief discontinuities in portfolio value.
The way to mitigate this downside is to feed the dividend information back into the algorithm; if the algo knows that a dividend happened, it can adjust the prices if it thinks it needs to. That's still on our "to do" list. We need to do the same thing for live trading. Right now in live trading and paper trading, the price change is streamed into the algorithm but it doesn't know there was a dividend. I don't know yet if we're going to make that fix for live or backtest first, or do them both at the same time. We'll have a more robust backtester when we do it.
Attached is an algo that you can use to look at the phenomenon. There are 5 signals in the custom signal area. You can get better resolution viewing the data if you click on the legend and toggle. Look at price and mavg together, then turn those off and look at position, cash, and portfolio together.
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