MBS Down Under 200 Day Moving Average | 02/21/2021

MBS Down Under 200 Day Moving Average

The Stock and Bond Markets will be closed on Monday in observation of Presidents Day. Our office will be closed and our next update will be on Tuesday.

 

Stocks and Bonds are both lower to start the day, but MBS have broken beneath their 200-day Moving Average, which is a negative sign.

 

It’s a quiet economic news day, which means that technical analysis will drive market direction. Next week will be centered on Housing:

 

Monday: All Markets Closed for Presidents day

Tuesday: Empire State Manufacturing Index

Wednesday: Mortgage Applications, Producer Price Index, Retail Sales, NAHB Housing Market Index, Fed Minutes from the 1-27 Fed Meeting

Thursday: Initial Jobless Claims, Housing Starts and Permits, Philly Fed

Friday: Existing Home Sales

 

Mortgage Bonds have broken beneath their 200-day Moving Average, which is a negative sign. They look like they will likely test support at 102.497 before rebounding higher, much like they did on January 12th. That means there is almost 30bp of downside risk. Additionally, the 10-year, which has been testing overhead resistance at 1.19%, has started to break higher.

Have a locking stance.

 

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