Will we break below support? That is the question….

Something is about to give in the mortgage rate market…  Will rates move higher or will we see a bit of improvement in the near term?  The battle between the bulls and the bears is currently underway, with bonds now sitting on a crucial support level and facing overhead resistance at the same time.  If the nasty downward trend wins the war, mortgage rates could quickly move another .25% higher.  However, if support holds, we could see mortgage rates stabilize or even improve slightly.  With a light news day today, and with many bond traders still enjoying an extended holiday vacation, there is no clear catalyst to move the market in either direction.  We can wait and see what transpires.  However, be ready to lock at any sign that we will break below support.  Should a break below occur, lock quickly, as a sharp drop could be expected.