Municipals were mixed in very light trading yesterday, thanks to the Veterans Day bank holiday.

The market opened flat as many market players took the day off or left their desks early. Inactivity was also fostered by the fact that the Treasury cash market was closed and futures trading terminated at 1 p.m., eastern time.

Trading was practically nonexistent, players said. But, in follow-through business, Smith Barney Shearson freed $826 million New York City Municipal Water Finance Authority water and sewer system revenue bonds from syndicate restrictions.

The maximum current interest term bonds, the 5 1/2s of 2019, were quoted at 5.78% bid, 5.75% offered. The bonds were originally reoffered to investors at 5.73%. Traders said serial bonds were offered at the takedown, while bonds were bid at the original level, less 7/8 to one point, depending upon the maturity.

In other secondary dollar bond trading, prices were mixed in light action. Chicago O'Hare MBIA 5s of 2018 were quoted at 5.60% bid, 5.57% offered; New York State Power Authority 5 1/4s of 2018 were quoted 96 1/8-97 to yield 5.50%; and Triborough Bridge and Tunnel Authority 5s of 2020 were 93 1/4-94 1/4 to yield 5.44%.

Also, Pittsburgh Water and Sewer FGIC 4 3/4s of 2016 were quoted at 5.42%-bid none; Florida State Board of Education 5 1/8s of 2022 were quoted 94-95 to yield 5.54%; and Los Angeles DEWAP 5.40s of 2031 were 5.70% bid, 5.63% offered.

In the debt futures market, the December municipal contract settled down 13/32 at 101.20.

Reflecting a heavy secondary market, The Blue List of dealer inventory rose $57.4 million yesterday, to $1.72 billion. The Bond Buyer calculated 30-day visible supply at $5.93 billion.

Yesterday's holiday session gave the market a breather from more than two-weeks of painful losses. The credit markets began backing off their high prices when economic indicators reflected an improving economy.

Some players argued that the market has suffered enough of a price drop that buyers will return and bonds will rebound in the coming months.

"It looks like the market correction we've just experienced is over for now," said Bernie Shnitzer, senior trader and executive vice president at J.B. Hanauer & Co. in the firm's latest newsletter. "I see a buying juncture approaching and it may be as early as the end of this week or early next week. I would first, however, like to see one more sell-off take place in the market."

Schnitzer said that the current quarter "could show continued growth due to an increase in consumer confidence and spending. Nonetheless, during the first six months of 94 we may see the economy slip backwards again, resulting from President Clinton's new tax program. The effects of this could be felt as early as January 15th's filing deadline."

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