After the last two items were released, the benchmark bond made a move higher but has since pulled back. The RSI is still oversold but the benchmark bumped its head on the 1st support level (which acted like a resistance level in this case) and has sold off to current levels - down 4 basis points on the day. If you look at the chart, it looks like we are starting to channel, which means one of two things, the market is either about to change directions and go up OR investors have no idea what to do right now and are looking for more solid direction from the economy as to whether they should buy or sell. Take a look:
The channel isn't strong but if you look at the last six trading days, the tendency is to gravitate to a price somewhere between 101.3 to 101.5. Economic data has mostly missed over the last month or so and there are disconnects in the data. It's easy to justify being conservative and locking now just to be safe since rates are very good. However, with virtually no data on tap for tomorrow (Markit PMI Composite - no, that's not a typo), and no data until next Thursday according to my calendar, I'd strongly consider floating as well. If you do decide to float, make sure you (and especially your loan officer) watch the market very closely so that you can act quickly if the market moves against you. Please feel free to contact me if I can help with anything mortgage related.
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