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Monday, June 15, 2015

Mortgage Bond Market Analysis - Green Day

It's Monday and so far it's GREEN.  Over the last nine days with one exception, we have alternated between up days which are green (good for rates) and down days which are red (bad for rates).  Some of those down days had data that showed weakness in the economy and the bond market still sold off.  Of course on the good economic days the opposite wasn't necessarily the case all the time. That said, we had a great day on Friday in spite of some better than expected data including some inflationary PPI numbers.  The benchmark bond is up slightly this morning, currently up 9 basis points but is off it's high for the day by 17 basis points.

I would float with caution and be ready to lock should the market make a sudden move.  The RSI is slightly above oversold the first level of resistance at 102.86 is proving to be strong as the benchmark bond has tested it each of the last three days and lost.  It is currently 1 basis point above the resistance level.  Closing some decent amount above the resistance level would be a good thing and could be a good sign for the near term.  Closing below it might show that traders are looking for more reason to sell off and would do so with more positive data.

Please feel free to reach out to me via email ( or by cell (702-812-1214).  I'm happy to help however I can.  Make it a great day.

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