Posted by: stockscooter | August 15, 2012

The Great Municipal Bear Market

Meredith Whitney, one of my favorite analysts of all-time, did a scathing report on the municipal market in September, 2010. I have it marketed for you on the chart.  She has been condemned for it, since the markets did not crater and bankruptcies did not fill the air.  I believe her analysis was spot-on and much too futuristic.  She is such a great analyst, but in my opinion she called it a year and a half early.  There was one last 5 wave advance that needed to be extended and I do believe that has been put into place.  My chart shows the the last advance stopping in February of this year.  If my first-to-turn indicator, which is highlighted with the blue circle, ends this month negatively, it presumes bad things ahead.  Usually a turn-down at the 0-axis means impending bad news.  Since my other trend indicators haven’t crossed, and neither has my reverse-mirror indicator, it would take a serious break-down in price to turn trend downward this month.  We have a couple weeks to watch, but the recent high, ending in July may be the last high for awhile.  The caveat is that this still could be an extended 5th wave, in some form.  For that to be true, and for new highs to materialize, the first-to-turn indicator needs to turn upward, from it’s currently sullen mood.  One would think that the powers-that-be would keep prices elevated, going into the elections.  The heavy weight of looming downgrades and defaults may make that impossible.  Let’s watch to see how this month ends and whether or not we can make a new high.

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