06 Nov Very cautiously floating
Mortgage bonds are trying to rally after drifting lower for the last 2 weeks. Price has also fallen below the 200 day moving average, which is concerning as well. The break above the 200 DMA occurred on October 22nd, and that was the delayed monthly jobs report that fell short of expectations. Previous of that, prices had not been above the 200DMA since May. Stock indexes have made a push towards new all time highs, which is adding pressure on bonds as well. There are no economic reports today, but the rest of the week has a few market moving reports that should set the direction of bonds next move definitively. We will see Initial Jobless Claims, and the first look at Q3 GDP tomorrow, and the monthly Jobs Report for September on Friday. A cautious float bias can be considered as long as prices hold at current support levels, but locking ahead of the volatile storm will be the safe play.