Wednesday March 18 2020
In my weekend update, I mentioned that bond prices and yields are telegraphing real problems. That is clear in the municipal bond market.
Here the price has wiped out the last five years of gains. Never mind the yield you received, all gains are now gone. Clearly the next target is the 2013 low at 9.0 for this fund.
In two short months, this fund has lost 44% of its value. The message is clear, the market is terrified of municipal defaults. The spread on junk versus treasuries jumped today to something like 8 percentage points difference. . Speaking of Junk, I am amazed those funds have held up as long as they have in this decline.
JUNK
Much lower prices are being forecast here.
Only 7 % of S & P stocks are over their 200 MONTH moving average
It took months to reach this level in 2008 - 09, we have done it now in two months.
Transports
my first target was the 200 Month MA, but as fast we the decline is happening, much lower prices lie ahead. OH this two month decline wipes out six years of advance.
Notice the PMO at bottom could fall a long way before bottoming as it did in 2009.
Energy Crude Oil WTIC
Crude oil is now trading lower than its 2009 final low in March 2009. And again the PMO
has not registered a low.
20 Years Ago
Oil is now trading at the lows last seen during the 2002 dot.com bust.
1997- today
Hard to believe but the new target may be the 1999 low at 10 - 12 bucks.
Nustar is a well managed pipeline firm headquartered here in San Antonio.
In two months NS has wiped out the last 18 years of advance.
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