MBS Day Ahead: Bond Momentum Couldn't Be More Equivocal

Posted To: MBS Commentary

Rarely do we see such a well-behaved and long-lasting consolidation trend in bond markets. This refers to a series of higher lows and lower highs. We can draw trendlines for those lows and highs based on intraday trading levels or on the "confirmed" closing levels. (Read more on " confirmation " as it related to technical analysis HERE ). The following chart includes both of those sets of lines. Both share the exact same slopes. In other words, this consolidation is perfectly flat no matter how you slice it. Other technical studies (like the slow and fast stochastics in the lower section of the chart--both momentum metrics) only adds to the sense of " SIDEWAYS !" Both are in the dead center of their respective "overbought/oversold" ranges, meaning that...(read more)

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