Florida Mortgage Market – Morning Update

by Florida's #1 Mortgage Planner on May 9, 2008

Locking Stance:  CAUTIOUSLY FLOATING     Mortgage Bonds:  0bp

Mortgage bonds were up earlier today, extending gains from yesterday’s break solid move above their 25-day moving average.  There are some cautions that need to be heeded, but floating is looking pretty good right now, especially if you have some time before your closing.

The Balance of Trade came in a little higher than expected, but it hasn’t weighed on the markets.  Oil is also climbing, sending stock futures lower, so a lower opening is expected, giving a boost to bonds.

Here are the “warning signs”.  This morning’s news favors inflation versus recession, which bonds don’t like.  Stochastics are moving into the overbought territory, pointing toward the need for a correction.  The only real good news is that bonds are considerably higher than their 25-day moving average, so it should hold as support now.

I am still very cautious about the future of bond pricing, but for now, the risk reward appears to favor floating, though things can change quickly.  I will be flying today so I may not be able to give you a timely update if things change quickly today.

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