Municipal Bond Breakdown

[max momo]

Portends trouble based on this large volume:

MUB Basic Chart | iShares S&P National Municipal Stock - Yahoo! Finance=

 

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[MJ DeMarco]

I'm looking at this very closely as a potential buying opportunity. Yes, yields are going up (which makes bonds fall) however I believe that state govts are more inclined to make cuts when they need to vs the Federal govt. Part of the decline also is the anticipation that the Bush tax cuts will be extended making Muni's less attractive. Muni CEF's have been particularly hard hit with their discounts below NAV accelerating.

As for the volume, Barrons had a great article about this in the current issue citing liquidity issues accelerating the downfall.