Florida Mortgage Rates – Evening Report

by Florida's #1 Mortgage Planner on November 13, 2008

Locking Stance:  LOCKING     Mortgage Bonds:  -44bp

This morning saw dismal data, along with some poor earnings news from Wal-Mart and Intel.  The fact that Initial Jobless Claims came in at their highest level since Sept. 11, 2001 was certainly nothing to give stocks a boost.

Mortgage bonds had been holding their own this morning, even rising from their lows to remain essentially flat on the day.  Then came a second wind from stocks and they rallied 900 points to end the day up just over 550 points after testing their support just below 8000 on the DJIA.  That rally sucked money from mortgage backed securities and caused my earlier alert to lock.

Everywhere you look, it appears that data points to a recession and continued troubles ahead, yet mortgage bonds are not in full rally mode.  Stocks have plunged significantly in recent months, but why are they not faltering further?  Are emotions still the major player in the markets, or have they dwindled and technical indications taken over?

In my earlier mortgage market reports, I mentioned that I was skeptical about mortgage bonds being able to breakout of their current trading range based on the charts.  Last week, I mentioned that a favorable jobs report would present the best opportunity for bonds to do exactly that, and they failed.  Retail Sales is tomorrow, so it begs to question whether or not mortgage backed securities have any life left in them as they face the second best chance of breaking out to lower mortgage rates.

Tomorrow morning will be yet another key player in the determination of where mortgage rates are headed.  If bonds react like they did last week, lock those loans now before bond pricing falls to the bottom again.  Check back in the morning to see if there is any hope left.

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