Florida Mortgage Rates – Midday Report

by Florida's #1 Mortgage Planner on February 25, 2010

Locking Stance: LOCKING   Mortgage Bonds: +16bp

Sorry for the delayed report, but I got caught up on other websites I am working on, including the NEW Florida Mortgage Report site.  In the meantime, I have not changed my stance and that is despite that little ray of hope that looked like it was going to get extinguished managed to get brighter.  Let me explain.

Durable Goods came in better than expected, except when you take transportation out of the equation, so it was generally a favorable report.  The headlines, though, focused on Jobless Claims, which were well above the expectations of 460K, coming in at 496K and bringing the 4-week average up to 473.75K.  Both of these numbers are the highest since November.  The 5-year T-Note auction weighed on MBS prices yesterday and prevented the potential breakout and that is what the charts predicted would happen.  But the charts do not always accurately forecast the future as they occasionally get surprises like this morning’s Jobless Claims.  So, the only way MBS prices would likely fall would be a poor 7-year T-Note Auction.  Well, they actually got strong results on that Treasury auction and now MBS prices are getting a leg to stand on and new chart patterns are forming.

With MBS prices holding yesterday and gaining today, the 10-day MA has skipped off the 50-day and is turning higher.  With MBS prices breaking above their 25-day MA, the downtrend is broken, though the 100-day MA is holding as resistance, so we may merely get a new sideways pattern.  Stochastic indications, the prior bright spot, have now moved through the middle ground, though still remain positive.  That means the next few days will be critical to establishing a new pattern, or trend.  The problem is that the market looks confused and that bothers me and I am not willing to risk it.

What does this mean for Mortgage Rates?  Mortgage rates edged lower this morning as the outlook becomes uncertain again.  We may be looking at lower mortgage rates or a new sideways pattern with rates edging back and forth for a while.

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