Mortgage Backed Securities continue to drift down – 8 bps today. We are now sitting just on top of a Fibonacci floor of support and immediately under that is the 200 DMA. If the stocks and the 10 year treasury continue to climb, they could potentially push MBS’ below those two floors. If that happens, MBS’ do not have another near floor of support and could free fall. Because of the momentum the market has experienced this week, we are holding a locking bias.
Have an awesome day!