Wed Sept 21 2022
Here is the inflation picture courtesy of yahoo.finance
As you can see this is way beyond the FED stated goal of 2% why is Jerome still in charge?
DJIA reaction to rate hike today
this is a two day ten minute, each bar is ten minutes duration, chart. The FED announcement as you can see came at 2 00 PM CST. The market plunged and then rallied and then closed the dayddown 522 points. Again this is a bear market, the trend is down.
What actually happened here my guess, is that there were lots of stop orders above and below the market to both buy and sell. The big oves up and down probably executed all those orders, wiping the slate clean as the saying goes, and now the down trend resumes.
Closed End Munis
I learned in the rate decreases of the 1980s that prices would accelerate right into the rate decrease and then fall back.
Now it works the opposite, prices fall right into the rate increase and then rally. I think we are finally at a short term low in long term bond prices. Tax free yields are good here 5-6% which taxable equivaent at the 20% tax rate is 6/.8 = 7.5%. this makes these bonds a great place to park money receiving the high tax free yield and probably a price increase.
four Month View Daily chart
Price just over shot the last two lows, again let's see tomorrow but I am guessing this is a buy, counter trend idea
Long term view, this could still fall apart but I don't think so
Prices have dropped by 1/3, but this is not the covid low so this should find the same support we saw in 2018.
this is a zero coupon bond, it really accelerates as rates fall a bit
Like BLE, is this the low or will it fall to the covid low of 202
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