Maintaining a locking bias

The news was mixed this morning as Retail Sales for November beat expectations, but Initial Jobless Claims jumped 68,000 from the previous week, which was well above the 315,000 estimate.  Stocks pushed lower at the open, and mortgage bonds moved slightly lower as well.  mortgage bonds dropped right off of resistance yesterday, and continue to trade within a downward channel.  The move lower was likely the results of yesterday’s less than stellar auction, which bonds will face again today.  The dominant trend for the last month has been down, which has resulted in interest rates pushing higher.  Any talk of taper at next weeks Fed meeting could propel markets either way.  After yesterday’s big move lower, if you want to take a risk you can start the day with a cautiously floating stance, as previous support is slightly lower.  But a break below that level, and we will quickly switch to locking.  However, the safe play will be to maintain a locking stance until we see some sort of stability in the bond market.