I LOVE being Wrong... on rare occasion
OK markets are about as easy to predict right now as which star you are looking at in the sky (not the obvious ones like North, Orion Belt, Big Dipper etc) the masses of dots are ... which ones? Exactly!
Market OVER-reacted to decent data but NOTHING that would warrant a 125bps sell off. Sure its nice to see unemployment numbers getting close to 350k but seriously 350k!?!?! We need to get BELOW 200k for years to really make a significant impact but I admit any positive news is good and likely to cause a rally of some sort but this one was WAY over the top.
With that said and the reports that hit on Thursday for PPI numbers and Empire Manu were a touch better than anticipated and it caused a large gap down open pushing the FNMA 3.5 under 102 for the first time since last Sept/Oct.
Were we poised for a free fall and possibly hit 101? That is what it appeared to be set up for, lets get a strong equities rally and make everyone feel good about things turning around. Well that's a great thought and goal but it needs to be based on REAL numbers that warrant that and a feeling or slight sign of improvement is not that.
So with all that said what is my title I LOVE being wrong, on rare occasion and am very glad that I was wrong on this call. The market held at 102, which was good even though it tried to, and did, twice but just barely. The markets since have come back to earth and the markets have slowly corrected with the FNMA 3.5 coupon closing today at 102.406. Still over 85bps lower than recent trading opened on Monday but a far cry from the 101.5 are I though we are destined for.
I like being right, I pride myself on getting the majority of my calls being accurate but in this case I am SO HAPPY I was wrong!
Maybe we get a little longer to enjoy these historic low rates but if this isn't a rude wake up call what is ACT NOW while opportunity exists!
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