In this Weekly Market Report we shall examine the highly controversial municipal bond fund market through a popular ETF. Municipal bonds have been highly debated among the so called experts as to whether or not these vehicles are safe investments for the future. As a technical trader, knowing where these ETF's will have support and resistance that can be traded either long or short is our goal. Traders and investors that want to know more about these ETF's should simply read over a prospectus of each fund in order to find out exactly what makes up these trading vehicles.
The iShares S&P National AMT-Free Municipal Bond Fund ETF (NYSEARCA:MUB) is the most popular mini-bond ETF around at this time. The current yield on the MUB is 3.24 percent which is pretty good these days. The MUB topped out on February 14, 2012 at $113.98 a share. Since that time, the MUB has come under some selling pressure trading as low as $107.25 a share last week. Traders should watch for short term support around last week's low. Should that level fail to hold up as support the next important support will be around the $105.00, $102.75, and $100.00 levels. Should the MUB increase in price from its current level, traders should watch for near term resistance around the $109.80, $110.60, and $111.39 levels. The MUB is currently trading below the daily chart 50, and 200 moving averages. Although the MUB is short term oversold this chart formation puts the ETF in a weak technical position at this time.
Some other mini-bond ETF's that are gaining in popularity include PowerShares Insured National Municiple Bond ETF (NYSEARCA:PZA), SPDR Nuveen Barclays Capital Municpl Bond (NYSEARCA:TFI), and the Market Vectors Long Municipal Index ETF (NYSEARCA:MLN). All of these muni-bond ETF's have a very similar chart pattern at this time. They are all short term oversold, however, they remain in a weak technical formation on the charts.