Prices still capped by 100 DMA

There were no economic reports scheduled for today, so there is no catalyst to move markets. It’s no surprise to see some profit taking after the big runs higher after the Fed’s announcement on Wednesday, with the Dow and S&P showing losses for now. mortgage bonds gave up a few basis points yesterday, but are trying to get them back today.  Prices are still capped by the 100 DMA, which remains a strong resistance level that has been established since mid-June.  The bond market will have $97 billion in auctions next week, and the economic calendar is busy as well.  We should also prepare to start hearing the next round of political bantering, given the approaching debt ceiling deadline.  Washington’s incompetence would be that much more entertaining if it wasn’t for the masses that are affected negatively by their tactics.  Given the history of the currentmortgage bond price level, locking in short term transactions will be advised, with longer term transactions giving it some room in hopes of better rates.