The Mortgage Man

Get more out of your mortgage experience!

Monday August 18, 2008

Mortgage bonds break above the 25 day moving average.

Mortgage bonds have been moving in a sideways channel for almost a week with strong support levels below it, and the 25 day and 50 day moving averages showing resistance above.  As these moving averages continue the downward slope to catch up with the lack luster market, it is only a matter of time before the charts are forced to move above resistance or below support levels.

Friday, bonds squeaked above the 25 day average then came back down.  And today, they opened above the 25 day, and have been solidly testing the 50 day.  Since there is no economic data due out today, this push for strength in bonds is based almost solely on weakness in Stocks.  With oil making a move back up today, it is very possible that mortgage bonds may close above the 50 day moving average.

If this were to happen, it would be a real positive note for a trend in better mortgage rates to come.  Of course there is more to the market than just trends on a chart.  But, it can be seen as a psychological victory on the part of traders.  Based on this information, it might be advisable to float your rate today to see if you can lock in a slightly lower rate tomorrow.  The choice is yours, but it is worth watching.

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1 Comment»

  Richardson mortgage wrote @

Hey, I have been folowing your posts from quite some time and I always found your posts very interesting and informative, this one is also very informative, keep up the good work!

Cheers!


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