Monday, November 10, 2008

Rate Watch: Carefully Floating

Bonds are testing resistance at the 50 and 20 day moving average overhead as Stocks rallied this morning on the heels of a Stock rally in China after they announced plans of a $586 Billion bailout plan (similar to the U.S.'s $700B bailout plan).

Stocks have not maintained the rally as the day progressed, ahead of an early closing (the Bond market is now closed and will be closed tomorrow for Veterans Day) as Circuit City announced that it is filing for Chapter 11 Bankruptcy and Nordstrom's announced 16% less growth (10% below their previous announcement).

I am recommending carefully floating as we continue to test resistance overhead. The shape of Bond prices, bond yields and Mortgage Interest Rates for the next two weeks will be determined by the movement in the Stock Market, which I will be watching very carefully for you!

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