Wed Sept 14 2022
Yes interest rates are rising, fast, yes inflation is rising, fast but prices of closed end municipal bonds have fallen by 1/3 in the last year.
On the long term monthly chart it looks like there is some support for price at this level.
BLE has a 5.8 % tax free yield, If you are in just the 20% tax bracket this means a after tax yield of
5.8 / .8 = 7.25%, wow that is some return, the monthly bar chart is a very slow mover, so yes PMO is over sold but don't think this is THE bottom
the red line shows a series of past tops and bottoms suggesting this is liable to be some support. Hmm, let the FED do another rate increase adnd that might bottom the price of the ten year treasury shown in the bottom panel, it is near a low now.
20 Year View
Okay so prices could go a lot lower. I am suggesting we are at a Wave One low here, whether it be an ABC correction or the start of five waves down.
Let's pay attention here, the next FED raise may give us a clue that a low is at hand.
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