Monday, November 17, 2008

Rate Watch 11/17/08: Floating

For the 9th trading session, Bond prices are dancing around the 200 day moving average. With the release of many key reports on inflation (tomorrow), and economic activity (today and tomorrow), I will be watching the market closely for movement above and below this important ceiling of support .

Bond Chart Education Moment: When the 200 day moving average is above current pricing, it is a CEILING. As the Bond prices convincingly break above (through) this level of resistance, we will see improved Bond prices and LOWER bond yields and LOWER Mortgage Rates. Of course, the opposite also holds true: a break convincingly BELOW this 200 day average will result in HIGHER mortgage rates (Bond prices LOWER, Yield HIGHER and Mortgage Rates HIGHER).

The bond movement at, above, and below, the 200 day moving average is what I will be watching for, and giving you advice on, over this next 2-3 days.

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