07 Oct Locking Bias
Today marks the 7th day of the government shutdown, but it’s also that much closer to hitting the debt ceiling deadline of October 17th. Markets opened with stocks lower and mortgage bonds slightly higher. The Dow is below 15,000 once again, and mortgage bonds are still below resistance and the 200 DMA. All government related economic reports that were scheduled to be released will continue to be delayed, but the Federal Reserve will release the minutes from September’s meeting this Wednesday. Any mention of tapering will likely have less of an impact, given the recent events with the shutdown. Interest rates have pushed to the lowest levels seen since mid-June. With the upcoming volatile nature of the day-to-day posturing by politicians, and strong overhead resistance, we will maintain a locking bias for short term transactions.