TGIF.  Dell and HP reported earnings last night, setting the table for another round of 100 point plus losses on the Dow.  Bonds and notes got the message, currently up 2/32’s on the 10 year note and plus 20/32’s on the 30 year bond (yields are 2.57% and 3.63%).  However, mortgage backs are dancing to a different drummer, down 3/32’s on the day.  For the most part, the market trades in a thin, low volume atmosphere with most participants looking forward to happy hour instead of their next trade.  It’s been a long week.

Overall, we see continued low Austin interest rates on mortgages and historically low yields on treasuries well into the 4th quarter.  The market is however forming a huge bond bubble that will someday create a massive correction.  That day is not today or tomorrow.

Technically, the rally from yesterday’s lows will add support towards further advancement (better pricing).  Stability at the 8 day moving average is supportive as well.  Oscillators are telling a different story.  One that reflects a lack of conviction to the bullish case.  In other words, the bull is due a nap.

Call the market at value, not expecting much movement either way.   Maybe early 2011 we’ll see the economic winds change direction.  We’ll wrap this up as the ice cubes marinate later today.