Locking a safe play

Locking a safe play

Mortgage bonds are trading lower this morning due to the CPI showing a bit more inflation than expected, with the biggest culprit being rising energy costs.  Earnings have continued to be positive as well.  This combination has been enough for investors to push higher, with the Dow up over 120 points this morning.  mortgage bonds are sitting just below the 25 DMA now, at the lowest level since QE3 began.  We will see how the Fed responds this week based on how mortgage bond prices hold up.  European markets are all positive on the notion that Spain is about to accept a bailout, which would stabilize the immediate fear associated with another market crash.  Locking is the safe play, but floating at the bottom of the price channel might be worth better pricing if you transaction just got started.