Bond and stock markets are trading light this morning, as many investors start their New Year’s celebration early. With markets set to close at noon Mountain Time, we should continue to see light trading.
After hitting the top of a trading channel two days ago, mortgage bonds are now likely to head towards the bottom as the day wears on. However, I could see a New Year bond rally take place. But, there is virtually no data that would make this likely. It’s more of a hunch based on the long over-due rally we should have already in the works. We will see how it goes.
Given the continued downward trend in the bond market, we will maintain our locking bias.