There was mixed data released today and the benchmark bond is testing the 1st resistance level AGAIN. However, the big news is likely to come from the FOMC meeting this morning. Everyone is looking to get a hint as to when the Fed is going to start raising rates. From all indications, when they do start, it will be very minimal and slow but the big question is when will they start. Most experts, including myself, think that it won't happen today. I think it will happen before the end of the year and it will depend on getting more consistent data that is showing real signs of recovery and growth.
The benchmark bond is currently up 17 basis points at 102.91 and is 5 basis points above the 1st resistance level. This level has been tested each of the four days and it has held firm with the benchmark bond trading above the level but closing below it. Each time it tries and closes below the resistance level, the level grows stronger and we are more likely to see a down trend barring any geo-political disasters or negative economic data that shows an about face in our economy.
The FOMC decision on rates will be released around 2:15 EDT. You may want to lock ahead of the decision since traders could easily take whatever decision the Fed makes and justify selling which would mean higher rates. My guess is that if we can get a more substantive idea about when they will start raising rates, we might see some buying in the bond market in the short term. The RSI is approaching the midway point between overbought and oversold even though we closed down slightly yesterday after being up slightly most of the day. Feel free to call me if I can help with anything mortgage related: 702-812-1214. Make it a great day.
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