The week ended with the terrific news that Existing Home Sales shot UP 9.4% in September to a 5.57 million annual rate. This was almost twice the increase the consensus expected and a nice boost coming off the slight drop we saw in August. Best of all, the inventory is now down to a 7.8 month supply, getting us closer and closer to the 6-month level of a normal housing market.
With most chart time frames in harmony, the future of interest rates will most likely follow the stock market’s lead. We’ll stick with our neutral call, keeping one eye on a stock chart and the other on MBS.