We mentioned in yesterday’s rate update that stocks may come under selling pressure because of technical trading patterns. Indeed that is happening this morning which is supporting mortgage-backed bond prices. Rates are modestly lower.
The technical trading picture for mortgage-backed bonds is complicated. We are going to recommend a locking stance for individuals who want to play it safe. However, for those who like to gamble, there is a chance that mortgage backed bonds could rally through technical resistance and move lower.
Current Outlook: locking