Tuesday, October 11, 2011

What does a Bond Chart tell you?

The beautiful thing about a Bond Chart is that it tells you where Bond prices have been and where Mortgage rates have been.  Can they tell the future?  Sometimes.  Here's how.

I study the bond charts all day long and I understand there are economic data or world news that negatively or positively influences the prices of bonds.  If bond prices go up, rates go down.  And vice versa, if bonds go down, rates go up.

So back to "how can the bond charts tell the future"?  The answer is simply this: History repeats itself.  You either love or hate history and it's the same with watching bond charts.  You either love it or you hate it and I love bond charts!

Because I watch Bonds all day long, I get familiar with floors of support and ceilings of resistance and can advise with a learned level of confidence a direction a client might consider and whether they should float or lock their interest rate.

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