Trust me, the pattern is bullish

Meant to post this yesterday:

Couple of things I’d like to point out as we close out the trading day.  First of all, the market had an “outside day up.”  What this means is that we made a lower low than the previous day, only to close above yesterdays high level.  In Austin mortgage terms, we had pricing at one time today that was worse than yesterdays only to close above yesterday’s best level.  Trust me, the pattern is bullish.

The tricky part of a bear market is that it can turn at any time.  Look at the chart.  You will see the down trend line that began in late February.  Way on the right side, you will see that last bar of the chart has reversed and is now ascending on that down trend line.  Also, if you look at the oscillator SStoch, meaning slow stochastic, you’ll see that it has yet to cross.  A cross is needed to confirm that the sellers have lost their edge.  RSI and MACD are neutral and of little help.  The point I’m trying to make is yes, we’ve had a good day but no, do not trust it.  It’s looking better and the bears will need to prove themselves tomorrow.  If they don’t, we’ll feel a lot better about a range developing between 3.75% and 4.0%.

One more thing, for those of you who would like to know more about a tool we use call Fibo Retracement Levels, I’ve put them on the chart.  Notice that we start at the highs which represents the top or 1.0 and stretch to the bottom labeled 0.00.  This would be a full retracement (high to low or low to high).  Fibonacci theory relies on measured moves within one standard deviation.  Therefore, the most likely targets lie at .375, .50, and .625.  We like the way that 3.75% come in at the 50% retracement level.  “If” we’ve put in a bottom for this trading turn, that’s the most likely target.  If the bears take over, we’ll be on our way to 4.25%.  Don’t go to sleep out there but at the same time, you may now exhale.  Hope you enjoy and are learning something from this rambling missive.

About Max Leaman Austin Mortgage

GREAT RATES, LOW FEES, CLOSE ON TIME™ ---- 2012 Ranked #1 Austin Residential Mortgage Lender (Austin Business Journal) 2010, 2011 & 2012 Five Star Professional (Texas Monthly) 2009, 2010, 2011, 2012, 2013 PrimeLending Chairman's Circle Award 2009, 2010, 2011, 2012 Scotsman Guide Top Originator (Top 200 Mortgage Professionals in U.S.A.) Better Business Bureau "A+ Rating" National Lender Rankings (Scotsman Guide): Top Purchase Volume (No. 10) Most Loans Closed (No. 32) Top Dollar Volume (No. 88)

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