Did Warren Have Help in his Muni Call?
- Posted by Greg Harmon
- on August 22nd, 2012
So I hear that Warren Buffett took another tubby and decided that Municipal Bonds were no longer a good thing to own. First questions: Was Meredith Whitney in the tub with him? Second: Dude what are you thinking? Giving him the benefit of the doubt and since he is a longer term investor let’s start with a look at the weekly chart to see what is out there.
The Andrew’s Pitchfork shows a break of the Lower Median Line followed by a retest and now a move back lower. Still over the Hagopian trigger line, which would indicate a bear move lower, but with the Relative Strength Index (RSI) bullish and Moving Average Convergence Divergence indicator (MACD) running flat, there is cause for caution but not a time to short yet. That foxy old man looks prudent on this time frame. But he has a very long view, maybe we should glance at the monthly chart as well. The rising channel dominates this chart. There are some signs of a topping action with the RSI flattening in technically overbought territory, with declining volume and a MACD that is fading. But the trend remains higher. For a long term investor like Mr. Buffett you would expect a break of the channel lower before dumping them. Maybe he is just early or maybe he got a tip in the tub.
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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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