Florida Mortgage Rates – Evening Report

by Florida's #1 Mortgage Planner on September 30, 2008

Locking Stance:  LOCKING     Mortgage Bonds:  -97bp

Mortgage bonds managed to break through their floor of support which leaves the future a little in question.  With them breaking below support, if they are unable to climb back up, that support will become resistance and the whole picture will have changed completely.

It will be interesting to see how the remainder of the week plays out as data flows and news continues.  After the House voted down the bailout bill, you could see the confusion and emotions taking over the markets.  While stocks and bonds traded opposite as they normally do, other aspects did not, leaving overall trader sentiment somewhat shaky.

Typically, when the dollar gains strength, bonds benefit as it aids in keeping inflation in check.  Additionally, when the dollar strengthens, commodities usually drop in price as they are based on the dollar.  Today, as the dollar strengthened, stocks climbed, bonds fell, and oil rose, basically doing the opposite of what is the norm.  When traders act opposite of the norm, many questions about the certainty of market movements arise, though the charts will present a very clear picture in the next couple of days.

For now, with support failing, and as I eluded to before, locking had to take over to prevent further losses for anyone.  Will bonds make it back to a rally?  The next day or two, certainly by the end of the week, we will have that answer.

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