MBS Day Ahead: Yes, It's Serious. Suit up. Man Battle Stations, Etc.

Posted To: MBS Commentary

Bond markets have recently set records when it comes to being flat and directionless. Technical studies that measure the presence and strength of any trend--higher or lower--show that we've been out all-time "trendless" levels until the past few days. Now, that may be changing. In August, we shifted from following a 'sideways' range to instead follow a 'consolidative' range. The lines drawn along the highs and lows in bond markets were converging (as can be seen in today's chart, and in most any chart I've posted over the past month). When we look at trendlines and pivot points, we use them as lines in the sand that let us know if the current state of trading momentum might be changing or if a longstanding barrier is being breached. In this endeavor, the...(read more)

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