Florida Mortgage Rates – Midday Report

by Florida's #1 Mortgage Planner on November 25, 2008

Locking Stance:  CAUTIOUSLY FLOATING    Mortgage Bonds: +102bp

Mortgage bonds are off their highs, but are still holding on to some nice gains, bringing further hope of lower mortgage rates based on the charts as well.  By piercing through the ceiling of resistance that had held mortgage backed securities for quite some time, they are again free to bring forth lower Florida Mortgage Rates.

The additional supply by the Treasury auction today helped to bring mortgage bonds down from their highs, but it went well overall.  With stocks now down on the day (just over 100 on the DJIA) and oil down a few bucks, mortgage bonds should remain poised for further gains, possibly seeing another spike tomorrow after the release of the PCE data.

Now for the bad news…

After every big move, there will be a retracement of sorts.  Just how much remains to be seen.  Stochastic indications are in an overbought condition, so more pressure will be added to bring bond prices down in the future.  And finally, bonds will likely face very strong resistance again fairly quickly, as they reach last seen January 22, when the Fed did an emergency rate cut of 75 basis points.

For now, as I said before, enjoy the ride, but be ready just in case.

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