End of MBS Slide May Portend Improving Mortgage Rates

After a slide of 231 basis points from November 25th through December 28th, mortgage backed seccurities (MBS) may be heading upward slowly over the coming weeks.  Our stochastic measurement tool shows us that the market is significantly oversold.  That means that there are opportunities to cash in on the month long sell off.  Traders will be looking to salt away profits.  Since as MBS bond pricing improves, interest rates decline, we may be in for one more re-fi opportunity.