Locking is the safe play

Locking is the safe play

With no economic reports scheduled for the day, all eyes are on the fate of Cyprus.  Negotiations for bailout funds with Russia apparently did not pan out, and officials are now speaking with an organization known as the Troika.  If Cyprus does not get  $7.5 billion by Monday, they will see a bank run that even George Bailey couldn’t talk his way out of. Even worse is the potential domino effect that could be triggered in other struggling European nations.  Meanwhile, the Dow is trading above 14,500 and the S&P 500 is less than 11 points from its previous record high.  mortgage bonds are right at home, trading within the confines of the dominant downward channel.  Prices bounced off of the ceiling a few days ago, but are holding close to that level for now. Bonds have tended to sell off on Fridays, which seems to be a result of the lack of Fed buying.  For that reason, locking would be the safe play for now.