With stocks in control, the balance of the week could see continued pressure (on mortgage rates) unless someone of substance “misses” on earnings

Stocks are on fire, closing up 256 points on the Dow and 63 points on the Naz.  Fixed income products are running for cover, pushing prices through the 38% retracement of the June/July rally.  For the record, the 10 year note is down 46/32’s (yield 3.61%)and mortgage backs are off 29/32’s as nothing but sell orders hit the screen.  The technical picture points towards the 50% retracement level which resides at 3.73% to 3.75%.  Sell signals have formed on most time frames but trend readings have not adopted bearish readings.  That’s the good news in this missive.  With stocks in control, the balance of the week could see continued pressure (on mortgage rates) unless someone of substance “misses” on earnings.  Weekly Unemployment Claims could give us a little help in the morning as we expect a rise on that index.

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