Monday morning and mortgage-backed bonds must have missed their cup of coffee as they are drooping miserably down 22 bps. The bond sell-off continues and we are resting on an important floor of resistance called the 50-day moving average. This puts rates in the 6.25-6.375% range for the day. The question is: How low will we go in our bond prices? We've lost over 100 basis points in the past 3 days: that's a big lump of coal in the stockings of the mortgage world.
Have we seen the best rates of the year and now we're headed back to the mid 6% range? Or will we get the all-important bounce we are looking for? Over the past 3 months, we've typically seen MBS prices hit a bottom and then bounce back nicely, but again, there is a lot of volatility in the markets and it's hard to predict what's "normal" and what isn't.
Where do you guys think rates are going? Will we bounce back up or fall off the trampoline?