Mortgage Bonds currently above the 200 DMA

The release of the monthly jobs report by the Labor Department came in at 148,000, which was well below the estimate of 183,000.  The headline figure for unemployment dropped to 7.2% from 7.3%, but the Labor Force Participation Rate remained at the 35 year low level.  There was virtually nothing to cheer about in this report, and that results in continued pressure on the Fed to maintain QE at wide open throttle.  Investors felt the same as the Dow pushed 100 points up, and the S&P 500 hit new territory.  mortgage bonds are currently above the 200 DMA, and at the top of a critical price channel established in June.  Bonds are not out of the woods yet, but if they can push convincingly above the current levels, they could rally and pressure 30 year rates to drop below 4% again.  We will suggest floating cautiously, as long as bonds can keep their gains.