In the News
Monday is a “holiday” but here is what you should be on the lookout for this relatively quiet week:
- Consumer Price Index
This CPI is a monthly report that measures the increase in prices of certain economic goods and service, but excludes some items such as food and energy. The CPI always paints a rosier picture because it excludes two items that experience high inflation.
We weren’t able to stay above the top resistance line, broke through the middle one and I feel like we will be retesting the bottom support line. If true, this will mean higher rates in the short term.
Technical Analysis: 50 DMA (black line below) & 200 DMA (blue line below)
The moving averages are a lagging indicator that do a great job in confirming a trend in place. Two of the most relied on are the 50-day and 200-day moving averages. When the 50 DMA comes from above and crosses below the 200 DMA, it is a bearish indicator. Likewise, when the 50 DMA crosses the 200 DMA from below, it is a bullish indicator.
Take a look here how the bearish cross confirmed the trend back in February through April.
Fast forward to today and we see the moving averages flirting with each other. If the 50 DMA can get back above the 200 DMA, then we will see higher bond prices which will result in lower rates. This is something I will be keeping my eye on.
Please feel free to reach out with any questions with regards to rate and my thoughts on them. I’m more than happy to help out any way I can.