Very Cautiously Floating

Markets opened relatively flat after last week’s record high for the Dow.  Now that the Dow record is out of the way, the S&P 500 looks to be next in line.  It is currently trading at 1551, with its all time high of 1565 set back in October, 2007.  In spite of economic and political instability, the S&P seems destined to set new records soon.  mortgage bonds had one of their roughest weeks last week, continuing the downtrend we have been on since mid-January.  This has pushed interest rates to their highest point since the Fed introduced QE3.  With that said, bonds are ripe for a bounce after 7 negative trading days and are currently sitting at support levels from August last year.  We will start with a cautious floating bias.