MUB Municipal Bond Fund Daily Chart Rising Wedge Overbot Negative Divergence

Meredith Whitney continues to get beaten up by the bond industry day after day since her call in the Fall 2010 for States and Muni's to run into trouble during 2011. The press unfairly twisted her words into a short term time frame, and as price has recovered during 2011, Meredith has been on the losing end for the last few months. To be fair, Meredith actually highlighted this time of year as the time that things will heat up, as State budgets close out and the new fiscal year budgets begin, so stay tuned.

In the Fall, you can see the sharp price drop which made Meredith look like Einstein. But, as always happens in trading, price recovered giving the opponents of Meredith plenty to talk about during 2011 thus far. Well, after a 100% Fib retacement from 104 down to 95 and now back up to 104 again, the chart received an intial negative divergence spank down days ago. The rising wedge helped forecast this pull back as well.

Moving forward, this chart is topping and rolling over again. The indicators (RSI, stochastics, money flow) have no intention of ever reaching prior highs so the negative divergence will remain in place. Look for price to make another attempt at a high at 104. An outside chance exists that price may make it to 105-ish if you use the late November high as an H&S neckline; this would occur with a big slap down in the equities markets, but, overall, this chart shows that Meredith Whitney should have the last laugh during the back half of 2011 as MUB prices pull back down again as the months tick along. This information is for educational and entertainment purposes only. Do not trade based on this information. Consult your financial advisor before making any investment decision.