MBS Day Ahead: Still Waiting for a Break of the Holiday Consolidation


Posted To: MBS Commentary

Not to be confused with the consolidative trend seen in Q4, 2017, there's been a slightly more negative consolidation underway in the last few weeks. If it's not adequately implied by the verbiage, a consolidation refers to prices or yields getting closer together . On a chart, this often takes the form of "lower highs" and "higher lows." That said, it can also take the form of "ascending lows" and "less rapidly ascending highs," as is the case in bond markets currently. You might look at the chart above and think that the upper line could , in fact, be drawn from the highs of December, and thus fill the role of the "lower highs" trendline discussed above. That would technically be OK, but 9 out of 10 technicians agree that lines with…(read more)

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