Market Curiosity: Exploring Markets And Systems

December 14, 2010

Dollar death: muni bonds (3)

Filed under: Just Watching — Tags: , , — Jeff Fitzmyers @ 6:53 pm

The US Dollar looks to be in trouble. It is based on debt, or possibly more accurately the ability to sell debt. And actually a US Dollar is 371 4/16 grain (24.1 g) pure or 416 grain (27.0 g) standard silver. The current colloquial “dollar” is actually a Federal Reserve Note. It’s debt. And debt is loosing it’s status since there is so much of it floating around.

Here is a nice graphic of municipal debt (MUB). Does not look good:
– Below both moving averages
– Moving averages have crossed over
– Big volume on the down days, less volume on the up days
– Big ranging bars compared to October
– The pullback in late November did not pull back very far

The weekly muni bond chart is interesting. At first glance it’s not so bad.
+ Price is still above the highs of late 2008.
On closer inspection though…
– There is relatively big volume the past 5 weeks compared to Oct 2008. (This is a big deal. It suggests price was going down in sympathy with the stock market in general. Now munis are being sold.)
– The recent pullback B was very shallow compared to the older pullback B
– By the 6th week price was already heading back up and into the pullback A area

And a quick update on bonds:
– New lows on large volume
– Now riding the lower Bollinger band (not shown)
– Down volume is increasing on this leg down (last 2 weeks)
– Recently 7 down days and 3 up days

References:
Bonds: The Death Of The Dollar (2): Sell When Price Undercuts
Bonds: The Death Of The Dollar (1)

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