MUB Muni Bonds Weekly Chart Overbot Rising Wedge Negative Divergence

We have not looked at muni's since the Fall spike higher. The blue lines show the negtive divergence spank down that occurred but instead of leading to further downside action, Chairman Bernanke's Fed, the BOE, BOJ, and the ECB with the LTRO 1, China, even other emerging countries, all created easy money that had to move somewhere and this is one of the places. Note the launch in December as the LTRO1 party began.

Keystone was looking at the 108's as a top as 2011 ended, but once the money printing machines were in gear, all bets were off. Money has chased into divvy stocks, muni's and high-yield corporate bonds creating new bubbles. The red lines show the rising wedge in place and negative divergence that creates the smack down. The green line for the MACD line, however, is showing a long and profile, thus, price will want to bounce after this sell off finishes. Perhaps a bounce off the 20-week MA in the 108-109 area will be in order now and a move back up to satisfy the MACD line.

Then all indicators should be negatively diverged, clearly spelling muni's fate for the remainder of the year. Keystone has a muni bubble top in this year's predictions and it appears the top is forming now. Projection is sideways to sideways down for the remainder of the year. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here or any links connected to this information. Consult your financial advisor before making any investment decision.