MBS Day Ahead: Bonds Can Absorb Some Weakness Without Derailing The Trend

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Posted To: MBS Commentary

It looks like it will be touch and go for bonds as the week begins. If yields or technicals touch certain overhead ceilings, you should go lock your loans. If you're up to speed on Friday's technical victory, you're equipped to understand this week's outlook. If you're not, here's a brief recap. We've basically been waiting for bonds to show us a bigger commitment to gains after a few half-hearted attempts to break the shackles of the sell-off that began on 9/11/17. Friday finally delivered the first technical "victory" with trading levels breaking below the 200-day moving average (also the high-volume, high yield mark from the big "tax plan day" sell-off at the end of September). We'd also been hoping to see MACD (the bottom indicator on…(read more)

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