Municipal Bonds have had a very good run since June 2013. But with the pullback and sideways action in 2015 is that run over? I shared some thoughts from a longer perspective here last month but it involved looking at longer term monthly price action. Where the longer term is good at giving a clearer picture, it can often miss the turning points. For this the intermediate chart can give more granularity.
The chart above of weekly price action of the Municipal Bond ETF (NYSE:MUB) does give more granularity. But it comes up with nearly the same conclusion. The chart shows a AB=CD pattern in the weekly price action. A rise followed by sideways and a fall only to start higher again. And this AB=CD pattern targets a move to 118.25. The monthly charts looked for 117 so pretty close. The recent action is a bit concerning and a move under 109.25 might derail this but until then the future for Muni’s looks bright.