Breakout to the Upside...

I have to admit sometimes glory is found in being wrong. Yesterday I prophecized that we were moving into a breakout which I expected would be to the downside raising yields and interest rates. Well, it came sooner than I expected and brokeout to the upside.

Yesterday we saw an 11 tick gain by the end of trading, and after starting down in the early morning hours today, we have moved to the upside, now trading 5 ticks in the green. Again for any newbies, gains in the secondayr market lead to low yields paid to the investors. The yields have a direct correlation to the interest rates offered to borrowers... hence the name mortgage backed securities. In other words, gains lead to lower yields, which lead to better interest rates for homeowners in the market.

This breakout to the upside is not just good for rate sheets today, it also shows signs that our market is still in an uptrend, wihch means support fo rthe interest rates being offered. I seriously about that we are going to see a major sell off that will lead rates back into the 5.000s anytime soon. Of course we need to pay attention to the 10 year, should that yield rise back up we will see our market retreat, although I do not this this is going to happen at a sharp pace.

At this point in time, I'll confident calling the all clear on interest rates and their remaining low until at least labor day weekend. When the long weekend comes it will be interesting to se how our market reacts and if rates move. Not going to get into the "whys" on this at this point in time, just want to throw out that fact that if you're working on a refinance at this point in time, you should be safe floating for now, but as labor day approaches, prepare to lock.