MBS Day Ahead: What’s Next if Bonds Remain Under Pressure?

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Posted To: MBS Commentary

Yesterday was a wake-up call, forcing us to think about defense vs offense Shorter term trends already under attack longer term trends aren’t too far away from being under attack revisiting longer term trend boundary would be scary Yesterday’s FOMC Minutes and corresponding market movement served as a wake-up call for our sleepy, little, low rate range that has persisted for most of 2016. The “triangle” we’ve been tracking is suddenly at risk of being challenged. That’s either a good thing or bad thing, depending on your point of view. In the positive sense, reaching the top of the triangle and the ‘oversold’ levels in fast stochastics (the red/blue lines breaking the ceiling in the chart above) would provide a cue for the next bounce in the consolidative range. Of course, this assumes that…(read more)

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