Monday, December 26, 2005


Recent columns have dealt with Closed-End Bond Funds, especially munis, that sell off at year-end and are bought back after the new year. Last Friday, on the Nightly Business Report, the CEF guru - Thomas Herzfeld - was interviewed about these and, although he echoed my comments, he did have different funds to recommend: symbols JQC,HTD,PIF,SCD,PBF,EVG, and HIX. Also, in Barron's over the holiday weekend, Bill Gross of PIMCO also made mention of this tax-loss occurrence, citing his own funds (which are not at a discount) and VKA, which is.This anomaly occurs again , usually in the March/April timeframe, so one should use their Technical tools for entry and exits, although 6% tax-free isn't a bad hold.
Not much changed in the Sentiment picture during the quiet week, with some improvement by the CBOE put/call ratio to 62, the McClellan Oscillator moving up through the zero line to 16; the AAII Bears improved a bunch up to 28.2, as the Bulls pulled back to 41.
The real standout was Public to Specialist shorting which shot up to a 12-month, even 5-year high of 5.68 - unless this is some kind of glitch number by IBD. It could also reflect yearend window dressing, but it shares the caution with the CBOE number.
Happy New Year - here's hoping for the Santa Claus rally this week and into next.

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