MUB Municipal Bonds Weekly Chart Rising Wedge Overbot Negative Divergence

Weekly chart shows a smaller rising wedge (blue) within a larger rising wedge (red). Note the firm negative divergence that remains in place as shown by the red and blue lines, as well as overbot conditions with the rising wedges. Nasty chart. The daily chart is in agreement as well so price is about to receive another serious slapdown like September. Note the recent buying volume does not surpass the average of the previous levels over the last year further indicating that buying interest is waning at these levels. Last week's candle is a hanging man. The 20 week MA held after the September selloff so that requres watching moving forward. The RSI has a hair more strength over the last three months which means a slight sideways stutter step may occur over the next couple weeks, any second move up for price, however, consider it a gift, that would be the last chance to jump ship.

MUB is fun to follow to note the progress of Meredith Whitney's call on the muni market in the Fall of 2010 on 60 Minutes at the 102.5 price. Thus, the intial call was fantastic as muni's rode the down escalator into 2011 but price recovered all the way thru this year. Meredith's call became incorrect this summer of 2011, and the muni market bulls have been correct for the last half year. Price should easily work back down towards 102.5 during 2012, even lower, perhaps back down into the 90's, so Meredith should have the last laugh, although her timing will be off by a year. Right now would have been the perfect time for Meredith to make the call.

Projection is for price to receive a spank down now and move sideways to sideways lower for the forseeable future. This is a significant top that may not be seen for weeks, months, perhaps years. 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.