Market New: Stocks, Bonds and Interest Rate

Monday's bond market has opened in positive territory following a negative open for stocks. The stock markets are starting the week off with losses with the Dow down 10 points and the Nasdaq down 15 points. The bond market is currently up 6/32, but we will likely still see an increase in this morning's mortgage rates of approximately 125 of a discount point due to weakness late Friday.



There is no relevant economic news being released today. The rest of the week will likely prove to be very active in terms of mortgage rate movement due to the economic data and other events that are scheduled. There are six economic reports scheduled for release between tomorrow and Friday, in addition to another Federal Open Market Committee (FOMC) meeting. Together, we have the makings of a potentially volatile week in the financial and mortgage markets.

Market Info

Bonds are trading slightly higher this morning but may come under a little pressure later today, as Stocks have opened higher on the heels of strong earnings and future outlook from Wal-Mart.
Wal-Mart is a bellwether for the entire retail sector, and with the important Retail Sales report due tomorrow morning, Traders could now be expecting a strong Retail Sales number--which would be good for Stocks, but bad for Bonds. So I will be watching carefully as the day progresses, since Traders may position themselves into Stocks rather than Bonds.
Technically, Bond prices remain above the 25-day Moving Average. With little economic news for the day, Bonds will likely continue to be driven by Stocks. For now, I recommend to Cautiously Float, as long as Bonds remain above the 25-day Moving Average.

The Rule is Good News is Bad News and vice versa

"When it comes to the Bond Market, the rule is good news is bad news and vice versa. Durable Goods was reported at -4.9%, which was lower than expectations of -3.5% and bad economic news, which should be good for Bonds. But Bond prices have actually worsened because the 200-day Moving Average ceiling is too difficult to break.
Technically the 200-day Moving Average is powerful resistance by itself, but the 25-day Moving Average is also close by, making this dual ceiling of resistance too tough to break. Because of these factors, I am recommending a locking stance for today."