Market Update

The Core Personal Consumption Expenditure (PCE) Index--which measures price changes in consumer goods and services, minus food and energy--came in at 0.1% for August. In addition, the more closely watched year-over-year Core rate came in at 1.8%. This is welcome news, as the Fed's target zone for inflation is between 1% and 2%. The Personal Income and Spending Report was also released this morning and showed consumers are resilient with a 0.6% increase in spending, the highest monthly growth rate in three years. Bonds are showing some life after breaking above the 200-day Moving Average. For now, I recommend floating, but I am keeping a close eye on the bond, as overhead resistance is nearby.

Market Update

Mortgage Bonds are having a hard time breaking through the 200-day Moving Average, even with today's weak Housing numbers. New Home Sales for August were reported at 795,000 --which is lower than expectations of 830,000. In addition, the median home price came in at $225,000, the lowest level since January 2005. Until the Bond can convincingly break above the 200-day Moving Average, I will recommend a locking stance.

Market Update

Mortgage Bonds are trading slightly higher this morning after some weaker than expected economic reports. For instance, Consumer Confidence for September was reported at 99.8, which is lower than expectations of 104.5 and is the lowest level since November 2005.

In addition, Existing Home Sales for August were reported at 5.50 million units, essentially in line with expectations. However, the inventory for single-family homes represents a 9.8-month supply, the most since 1989. Technically, Bonds are sitting near the 200-day Moving Average. So for now, I will maintain a Neutral stance with a bias towards Locking, as the Bond fights the 200-day Moving Average.

Market Update

Mortgage Bond prices have changed very little so far today and are right at important support at the 200-day Moving Average. Commodity prices, including gold and crude oil, continue to move higher, which is a concern for bonds because of inflation pressure.There are no economic reports on the schedule today but later in the week the Core Personal Consumption Expenditure Index (PCE), the Fed's favored gauge of consumer inflation, will be released. All ears and eyes will be glued to this report for any hint of consumer inflation.If bond prices can remain above the 200-day Moving Average, I will recommend to Float until this floor is convincingly broken.

Market Update

Today, mortgage Bonds are trading just below the 200-day Moving Average. Presently, I feel it is prudent to float, as I wait and see if the Bond can muster some strength and move above this level. Should the Bond get pushed lower and farther away from the 200-day Moving Average, I will be changing my position to a Locking stance."