Municipals Fiddle while California Burns

Three sizable municipalities in California have filed for bankruptcy protection recently, and the folks that live out there say it is going to get worse before it gets better. So what is the iShares S&P Municipal Bond Fund, $MUB, doing? Looking ready to move higher of course. Take a look.

iShares S&P Municipal Bond Fund, $MUB

There are a lot of positive features to this weekly chart. First the Simple Moving Averages (SMA) are all rising and price is above them. Next the Relative Strength Index (RSI) held in bullish territory on the recent pullback and is sloping back higher. The Moving Average Convergence Divergence indicator (MACD) is negative but heading back towards a positive cross. In fact with the recent consolidation it would take a move under 108.50 to trigger a short term negative bias and under 106 for a downtrend. The market is saying no reason to panic on Municipals yet. Maybe when the State of California file the $MUB will pay attention.

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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.

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