Market Update

Yesterday, Mortgage Bonds bounced off support at the 200-day Moving Average. And, while prices did finish the day higher, the advance was stopped at the 25-day Moving Average resistance level. This morning the Pending Home Sales Index for August, which is the leading indicator of existing home sales, came in lower than expected and Mortgage Bonds improved slightly on the weak news. Later today, Dallas Federal Reserve President Richard Fisher is scheduled to speak in Dallas, Texas at 1:35 Eastern Time and a Q&A session is expected to follow. Bond traders will be listening closely, as Mr. Fisher has been known to rifle off remarks that could impact the market. Since Mortgage Bonds continue to trade above the 200-day Moving Average, I will continue to recommend floating.