Cautious Float

Stocks are modestly positive today as the S&P 500 is sitting just below 1420, which has caused a double top over the last 4 years.  That means prices have not been able to break above this level twice in the past, so this 3^rd attempt will often result in another denial.  If it does break above, we will likely see a substantial move higher.  Momentum has certainly helped stocks get to this point, but the outcome remains to be seen.  If stocks break higher, it will continue to pressure interest rates higher.  However, if stocks cannot convincingly break above this point, and are turned lower, that should help interest rates move lower again.  Consumer Sentiment was above expectations today, but apparently that’s not enough to push the S&P beyond 1420 yet…  mortgage bonds may have found support after sliding for the last few weeks resulting in interests moving higher by about 1/4%.  We will start new transactions with a cautious floating bias.