Stocks Close a Great September Despite Small Setback on Final Day - 09/30/10 06:26 PM
Initial jobless claims were down this week and slightly lower than expected.  The second quarter GDP was adjusted from a 1.6%  advance to 1.7%.  Stocks opened higher on the day looking to bouncee ahead on the good news.  Aroung midday money began flowing out of stocks back in to bonds causing the Dow to close down 47 points.  Despite today's loss, this September was uncharacteristically good.  For the month the Dow closed up 7.7%, the S & P was up 8.7 and the NASDAQ was up a whopping 12%.
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September 30th Mortage Market Wrap-up - 09/30/10 06:13 PM
Mortgage backed securities (MBS) closed down 3 basis points today at 100..66 having taken quite a trip during the day.  Ironically despite better than expected economic news on jobs and the GDP, MBS bonds opened higher.  At one point during the morning, however, maverick selling began and the bonds crashed down 60 basis points falling through 2 levels of support at the 25 day and 50 day moving averages.  Somehow they managed an almost complete recovery which may be a positive for tomorrow's trading.
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Gold Soars as Dow Dips - 09/29/10 06:07 PM
With no economic reports due out today, stocks were left to react to other markets.  As gold mimicked Icarus soaring to new heights, stocks fell in step with the declining dollar.  Despite a recovery midday, the negative tone prevailed and stocks closed down slightly with the Dow falling 22 points.  The S & P 500 did manage to remain above 1140.  Tomorrow will bring the GDP numbers, initial jobless claims and the Chicago Purchasing Manager's Index.
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September 29th Mortgage Market Wrap-up - 09/29/10 05:38 PM
Mortgage backed securities (MBS) closed down 25 basis points today at 100.69 having climbed up  to resistance at 101.00 and been strongly repelled closing 31 basis points below its high.  This kind of rejection often indicates a fallaway in days to follow  In this volatile environment, however, anything could happen.  Two Fed speakers roiled the market today offering views dissenting from Bernanke's talk of quantitative easing (buying Treasuries).
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Walgreens Numbers Boost Dow - 09/28/10 06:32 PM
Stocks were off to a slow start this morning when the consurmer confidence reading came in at 48.5 below the 53.0 expected on the street.  A mild improvement in home prices reported by Case Shiller kept stocks out of the doldrums.  Walgreens reported earnings ahead of expectations causing a rally in the consumer goods and health industries late in the session.  Despite low consumer confidence, the Dow managed a 46 point advance for the day.
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September 28th Mortgage Market Wrap-up - 09/28/10 06:17 PM
Mortgage backed securities closed up 9 basis points today at 100.94 having broken through resistance at the 101.00 level and remained above it most of the day.  In the last hour MBS bonds fell away from their highs and once again closed below resistance.  Today's Treasury auction of $35 billion 5 year notes went well.  A late surge in stocks, however, prevented bonds from sustaining their earlier gains.
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Dire Prediction Drops Dow at the Close - 09/27/10 06:42 PM
After four weeks of positive trading, stocks opened slightly lower today despite positive futures readings right into the open.  The lack of much news other that the President's wishful banter about the economy and with another strong resistance level above for the S & P 500,  left traders without much direction or motivation.  Shortly before the closed a noted bear, Elliot Wave;s Prechter rattle his saber with talk of an impending sharp decline in equity markets.  On that new the Dow fell to a 48 point close.
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September 27th Mortgage Market Wrap-up - 09/27/10 06:34 PM
Mrtgage backed securities (MBS) closed up 56 basis points today at 100.84 remaining well above support and 16 basis points below resistance at 101.00.  With no economic reporting today, MBS bonds set out in a positive direction from the open.  When the auction of $36 billion in 2 year Treasury Notes received an excellent rating, bonds raliied and closed just 6 basis points below their high of the session.
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Job Loss Trumps Home Sales as Stocks Slide - 09/23/10 05:37 PM
Stock futures were lower this morning before the release of last week's initial jobless claims.  When that figure showed that 12,000 more jobs had been lost than the week before, breaking a five week run of improvements, a down open became certain.  Stocks were down over 100 points early in the sesssion before news of a 7.6% increase in existing home sales was released.  This buoyed stocks back to a slightly positive level before succombing to the jobs pressure and closing down 76 points.
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September 23rd Mortgage Market Wrap-up - 09/23/10 05:28 PM
Mortgage backed securities (MBS) closed down 3 basis points today at 100.62 having mangaged to remain above the critical support level of the 25 day moving average.  Once again, today's candlestick has a long wick indicating that it closed well below its high for the day.  This is usually a harbinger of negative movement tp come.  The stochastic chart which measures a market's level of being oversold (0) or overgbought (100) was just over 80 at the close of the day.
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Stocks Rollercoaster Landing Slightly Down - 09/22/10 06:15 PM
Volatility has become normal for stocks as they swing up and down during the day.  Still moping about Fed comments regarding an increasingly slow advance in the economy, futures handicappers set the tone for a negative open.  What a surprise, stocks open up an took an extremely stocatto rollercoaster ride during the day coming to a close 21 points lower.  One positive note was that the S & P 500 managed to close above an important technical level.
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September 22nd Mortgage Market Wrap-up - 09/22/10 05:58 PM
Mortgage backed securities (MBS) closed up 6 basis points today at 100.66 having shot up 44 basis points during the day, bounced off resistance and settled just above the double support of the 25 and 50 day moving averages.  Since they came to rest significantly below the high of the day, tomorrow's open may be negatively affected.  Weekly jobless claims and existing home sales will be market movers tomorrow.  I locked my first 30 year conforming loan at 4.125% today.
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Slow Growth Stunts Dow Rally - 09/21/10 06:29 PM
The Dow was truly tempest tossed today spending much of the day just under yesterday's close.  Housing starts came in better than expected as did building permits.  The Fed projected low inflation for months to come while the economy slowly plods ahead.  Stocks surged on the inflation news trading at one point up over 70 points.  The reality of the slow growth in the economy took over late and the Dow managed just a 7 point gain.
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September 21st Mortgage Market Wrap-up - 09/21/10 06:19 PM
Mortgage backed securities (MBS) closed up 72 basis points today at 100.59 having smashed through two tough layers of resistance offered by the 50 and 25 day moving averages.  The Fed minutes came out keeping the verbiage that they intend to keep Fed rates low for an "extended" period of time.  A lot of traders were hoping they would say something about new "accommodative" measures which could push interest rates lower.  In the absence of that, however, it was a great day for bonds.
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Stocks Rally Not Stopping to Mourn Death of Recession - 09/20/10 05:30 PM
Word that the "great" recession had actually ended back in June of 2009 sent stocks soaring today.  Although I am sure the news did little to buoy the spirits of those who lost their jobs and are still unemployed or under-employed, stock traders feasted on the news.  Having passed the 200 day moving average last week, the S & P 500 closed at 1142 above another technical milestone at the 1130 level.
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September 20th Mortgage Market Wrap-up - 09/20/10 05:20 PM
Mortgage backed securities (MBS) closed up 44 basis points today at 99.88 coming to rest just below double resistance offered by the 50 and 25 day  moving averages.  Once again today, MBS bonds staged a respectable rally in the face of an extremely strong advance in stocks. News of possible extended job creation woes may have helped bonds with their rise.  Tomorrow the Fed will issue its afternoon statement.  We will watch to see if any words are changed.
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Consumer Sentiment Holds Dow to a Meager Gain - 09/17/10 05:57 PM
Stock futures began the day in positive territory as Oracle and Reseach in Motion, maker of the Blackberry, released better earnings than the market expected.  The Dow spent most of the day right around the breakeven level.  Mid-afternoon brought extremely positive new from Caterpillar that their orders here and in Brazil had spiked up nicely.  Any euphoria resulting from that news was kept in check by a negative consumer sentiment report.  The Dow managed a meager 13 point gain.
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September 17th Mortgage Market Wrap-up - 09/17/10 05:48 PM
Mortgage backed securities (MBS) closed down 16 basis points today at 99.44 having headed down nearly to support.  Once again today the bond closed at its low for the day and the candle had a long wick.  As we saw earlier this week this combination is a harbinger of future negative results.  The consumer pricing index came in with nice low numbers today.  It is unusual for MBS bonds to selloff in the face of a good inflation report.
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Dow Managed Small Gain on Shrinking Jobless Numbers - 09/16/10 05:28 PM
A Producver Price Index, which provides a reading on production costs, came in slightly higher than forecast this morning.  That was tempered by news that initial job claims dropped another 10,000 this week to 450,000.  The Philadelphia Fed number came in negative for the second consecutive month.  Stocks traded near even for most of the day.  The Dow managed to close up 22 points with traders placing more importance on the jobless numbers than on the negatives of the day.
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September 16th Mortgage Market Wrap-up - 09/16/10 05:16 PM
Mortgage backed securities (MBS) closed down 19 basis points today at 99.59 having fallen below resistance offered by the 50 day moving average and coming to rest just 25 basis points above new support at the close of 7/28.  As I had mentioned, the indicators at yesterday's close pointed to lower MBS prices.  The bonds did manage to bounce off support, however, which kept them from falling farther.  A mixed bag of economic reports did not have ehough impact to overcome the downward technical signs.
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Stocks Struggle but Eek out Gain - 09/15/10 05:48 PM
Stock futures opened to the downside.  When the Empire State Manufacturing numbers came in well below expectations, they continued to flounder.  The S& P 500, an unmanaged index of 500 stocks thought to most accurately reflect the U.S. economy, struggled to stay above its technically critical 200 day moving average.  By days end stocks surged toward the close and 200 day average was maintained.  The Dow closed up 46 points.
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September 15th Mortgage Market Wrap-up - 09/15/10 05:39 PM
Mortgage backed securities (MBS) closed down 50 basis points today at 99.78 having once again fallen through support offered by the 50 day moving average.  MBS bonds closed at their low levels of the day and the Japanese candlestick had a long upper wick.  All of these conditions point to a negative direction for MBS bonds in the short term.  Bonds made a run on the 25 day moving average above during the day but fell into the close as dollards leaked from bonds to stocks.
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Improved Retail Sales Fail to Excite Stocks - 09/14/10 06:19 PM
Stock futures opened the day higher and moved up a leg when retail sales came in with a .4% increase.  This was higher than the .3% increase expected.  When taking auto sales out of the mix the increase was .6%.  Stocks were ahead most of the day before falling at the close.  The Dow closed down 17 points.  Tomorrow reports on the Industrial Production and New York State Manufacturing will be released.
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September 14th Mortgage Market Wrap-up - 09/14/10 06:10 PM
Mortgage backed securities (MBS) closed up 44 basis points today at 100.28 having broken through resistance offered by the 50 day moving average and having come to rest just below resistance at the 25 day moving average.  This represented the second consecutive day during which the market rallied in the face of good economic news.  Bond traders must have had a lot of short positions from last week's sell off that they are cashing in on now.
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Bonds and Stock Soar Together - 09/13/10 06:15 PM
The Basel III conference in Switzerland yielded some reassuring news about long term plans to stabilize global banking and prevent the kind of wild swings we have been seeing of late.  Markets react poorly to doubt and this news was like a soothing mint to sore throat.  In addition, word from China that their production levels were on the rebound eased concerns of a new recession.  September is thusfar an anamoly.  Usually one of the worst months of the year for stocks September has seen a 7% advance for the S&P 500 which achieved an important technical milestone closing above its 200 … (0 comments)

September 13th Mortgage Market Wrap-up - 09/13/10 06:06 PM
Mortgage backed securities (MBS) closed up 81 basis points today at 99.84 coming to rest just below resistance offered by the 50 day moving average.  Surprisingly MBS bonds soared today in the face of good economic news and a rising stock market.  Equities and bonds typically trend in opposite directions.  This unexpecteed comeback after 7 days of down trading equates to a .2% reduction in the 30 year conforming rate.
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Lazy Afternoon Leaves Dow Up 47 - 09/10/10 06:25 PM
The Dow closed up to marking the second straight week with positive results.  There were no economic reports today and trading was light.  As a result the Dow managed only a meager 47 point gain.  As I mentioned previously, it appears that the "safe harbor" trading dynamic has left us for now.  Next week there will be reports on retail sales, inflation for both consumers and producers and consumer sentiment.
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September 10th Mortgage Market Wrap-up - 09/10/10 06:15 PM
Mortgage backed securities (MBS) closed down 56 basis points today at 99.31 coming to rest not only below the 50 day moving average but also below the low of 7/28.  The next level of support is all the way down at 98.12.  Today the monthly coupon rollover occurred having reducing the price an additional 28 basis points but having no effect on the support levels.  Next week's early trading could portend the direction of rates for the short run.  The conforming 30 year fixed closed the day at 4.375%.
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Fewer Jobless Claims Pushed Dow Upward - 09/09/10 05:33 PM
On news that weeklky unemployment claims were down 27,000 and were below expectations, stocks opened up strongly.  Traders were also bolstered by knowing that their Euorrpean counterparts had traded upward for the most of the past week.  Unfortunately, however, Deutsche Bank "threw a monkey in the works" by announcing that they would be raising capital to buy shares of another bank.  This led to fearful speculation about other banks needing additional capital.  As a result the Dow closed up just 27 points;  well off its highs for the day.
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September 9th Mortgage Market Wrap-up - 09/09/10 05:23 PM
Mortgage backed securities (MBS) closed down 62 basis points at 99.88 having fallen through the support offered by the 25 day moving average and closing slightly below support at the 50 day moving average.  Positive employment news caused MBS traders to run for the hills.  As a result, the rate on the 30 year conforming mortgage spiked by more than .125%.  As you know every 50 basis point move in MBS bonds equates to a .125% change in rate.
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Consumer Spending Encourages Stock Traders - 09/08/10 06:21 PM
Other than the Fed's beige book, there was very little economic news today.  The beige book, published eight time a year, is a compilation of "anecdotal" information based on interviews and analyses conduct by each of the Federal Reserve Banks.  Today's reading showed that, although as previously acknowledged, economic growth seems to be slowing, consumers are becoming slightly bolder in their spending habits.  Initial jobless numbers will be released tomorrow.
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September 8th Mortgage Market Wrap-up - 09/08/10 06:14 PM
Mortgage backed securities (MBS) closed down 31 basis points today at 100.50 coming to rest just barely above support offered by the 25 day moving average.  MBS bonds gave back almost half yesterday's gains.  When the results of today's Treasury auction came in favorably, bonds made a run at a rally but the stock market had built up too much momentum and their was an opportunity to cash in on yesterday's long positions.
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Dow Dives as Euro Banks Shed Doubt Once Again - 09/07/10 05:33 PM
The stock market was shaken this morning upon hearing news that the stress tests performed on European banks may not have been as stringent as they should have been.  Apparently the tests did not take into consideration sovereing debt, which especially in the case of Greece could paint a gloomier picture than previously thought.  The Dow closed down 107 points.  In other news Obama's former budget chief thinks that the tax cuts should remain in place, as historically more revenue comes in when taxes are cut then when they are raised.
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September 7th Mortgage Market Wrap-up - 09/07/10 05:24 PM
Mortgage backed securities closed up 66 basis points today at 100.81 having smashed through resistance offered by the 25 day moving average and settled in between the two levels of resistance posed by the recent closes.  Global jitters once again spooked equity markets and rekindled the flight today safety trading behavior we have seen in recent weeks.  Today's large advance caused interest rates to fall by more than .125%.
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Private Sector Jobs Set Stocks Sizzling - 09/03/10 06:24 PM
The jobs report came out today flaunting improved numbers.  As I mentioned yesterday, the key to the report is the private sector hiring.  When it was learned that 67,000 new jobs were added instead of the 44,000 expected, stock excchange traders jumped for joy.  That combined with a significant upward revision to July's job numbers set the Dow up for a solid 127 point gain.
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September 3rd Mortgage Market Wrap-up - 09/03/10 06:13 PM
Mortgage backed secucrities closed down 46 basis points today at 100.16 having fallen through a support level offered by the 25 day moving average.  That level had not been broken for more than four months.  The former support level now becomes resistance and the new support level is now the 50 day moving average at 99.78.  This a prime example of good economic news pushing bonds downward.  This movement also created a dramatic, negative stochastic crossover which bodes poorly for bonds in the short term.
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Dow Manages Small Gain Ahead of Tomorrow's Jobs Report - 09/02/10 05:40 PM
A couple positive economic reports came out today allowing the Dow to build slightly on yesterday's sold gain.  Initial jobless claims fell last week and pending home sales for July actually rose.  This was especially good news after June's decline.  The Dow managed a respectable 50 point gain consdiering the anxiety over tomorrow jobs report.  The greatest scrutiny will be placed on the non farm payroll number which is expected to have added about 44,000 new jobs.
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September 2nd Mortgage Market Wrap-up - 09/02/10 05:27 PM
Mortgage backed securities (MBS) closed down 25 basis points today at 100.62 once again below double resistancee offered by the two recent closing highs and above support at the 25 day moving average.  MBS bonds traded down to the support level during the day and bounced off it in a typical market reaction.  Next week's Treasury auctions will offer only $67 billion in new debt which is less than recent auctions.
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Purchasing Managers Point to Greater Production - 09/01/10 06:33 PM
The Dow rallied today in reaction to a surprisingly good report from the ISM Manfacturing Index.  The Institute for Supply Management queries purchasing managers on their ordering levels for the month.  An improved index figure indicates stronger production and a stronger economy in coming months.  On the news the Dow surged upward by 254 points.  Reports on initial jobless claims and productivity will be released tomorrow.
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September 1st Mortgage Market Wrap-up - 09/01/10 06:23 PM
Mortgage backed securities (MBS) closed down 34 basis points today at 100.88 right at one resistance level but below the close of 8/20.  Although MBS bonds were able to surge forward in the face of positive economic news yesterday, they were thwarted today.  Sustaining yesterday's gain, as I mentioned, could have been a precursor for lower rates.  For now we will wait and see how economic events will shape future trading.
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