Colorado Mortgage Broker

RJ Baxter First Mortgage Corp Market Update February 22, 2010

RJ Baxter First Mortgage Corp Market Update February 22, 2010

My latest market update has been published.  Please visit RJ Baxter First Mortgage Corp Market Update to read the report.  Bottom line- mortgage rates got hammered last week on hot PCI inflation numbers and positive economic data.

CPI is also up:

CPI

Inflation is the enemy of long-term mortgage rates because inflation devalues the returns on such an investment.  This is bad for mortgage rates!

Bookmark and Share

See Today's Colorado Mortgage Rates & find out more about getting a Colorado Home Loan

RJ Baxter First Mortgage Corp

Branch Manager

303-670-0137 (direct)

Email Me

27902 Meadow Drive, Suite 120

Evergreen, Colorado 80439

Colorado Mortgage Blog

0 comments • RJ Baxter • February 22 2010 01:08PM

Bonds Open With Gap Lower - What the Heck Does That Mean? 2/10 Market Update

Bonds Open With Gap Lower - What the Heck Does That Mean?

Bonds opened today with a "gap lower" on poor reception of the Feb bond auction yesterday and speculation that today will be just as bad or worse.

So what is a Gap Lower?

2-10 ChardTake a look at the chart to the left.  You will see an important trend line, the yellow line, which is the 100 day moving average.  This is an average of the previous 100 days closing bond price. 

A gap lower means that bond prices open below the trading range for the previous day.  It is even more significant today because of the fact that the open was below the 100 day moving average trend line.  Trend lines can be important predictors of the future trading range of bonds.  As you will see, five days earlier, bonds opened with a gap higher, above the 100 day moving average, and then traded above that trend line for four days, giving us excellent opportunities to lock in better rates during that time.

Another event that spooked the markets was Ben Bernake's announcment that he will be forced to raise the Fed Funds Rate.  Although he did state that he won't have to do anything for at lease several months, the bond markets didn't like this news. 

Notice the purple trend line.  This is the 200 day moving average which now becomes an important level of support.  Rates are still good, but if bonds fall below this trend line and close below this line, rates could continue to drift higher.

Subscribe to weekly Mortgage Market Updates

 

Bookmark and Share

See Today's Colorado Mortgage Rates & find out more about getting a Colorado Home Loan

RJ Baxter First Mortgage Corp

Branch Manager

303-670-0137 (direct)

Email Me

27902 Meadow Drive, Suite 120

Evergreen, Colorado 80439

Colorado Mortgage Blog

0 comments • RJ Baxter • February 10 2010 11:34AM