Well, I'm vindicated!

I can remember if it was Monday or Last Friday that I mentioned we should have our best rates in quite some time today.

I know you haven't seen it reflected in lender's rate sheets yet, but the MBS prices support rate levels of late January.

It doesn't always pan out so nicely, but the analytics around the technical trend have held beautifully this week (I had mentioned that although rates got higher last week, they should come down this week based purely on technical forces).

We ended the day at the very height of MBS prices.  Great!  That means that even a bad day for rates on Monday won't take us below today's pricing as a good portion of the gains could not make it into rate sheets by close of business.  In other words, if nothing changed on Monday, rate sheets would still improve.  So we're starting Monday morning out with a couple Aces in the hole.  If we get dealt a bad hand, we won't be any worse off than today's pricing.

 As such, I'll be floating over the weekend.

The only other thing to consider is your time horizon.  If you have a closing approaching quickly, you will have to time one of the price peaks on this "bouncing ball curve" that is working it's way up the 50 day moving average line.  This means that, according to the technical read, rates will take a few steps back for a week or so fairly soon, but then it should be right back to improvements until we asymptotically approach our MBS price ceiling.

The caveats are manageable (but not subdued) inflation, and no precipitous market shockers such as a 100 billion dollar investment from overseas or a better than expected bailout of bond-insurers.  But hey, the market is known for her fickleness. 

Consider your position and be ready to lock if necessary.  Expect the losses when they come, because they will come.  If you can weather that storm and afford to wait to see if the analytics hold true, you will be rewarded, if you can't afford to wait to refinance, or lose money on your lock, Monday and the upcoming week will be a great time.  I can't tell you the best day for next week, but it could be as late as Friday.  And if it is, it will be a doozy owing to a crushing employment situation. 

More likely though, as stocks test their lows again, the market will be more in search of, and more responsive to positive data than negative.  If it goes hungry, rates will drop, but not as much as they will rise if the market gets positive data.  Still, I think this cat is dead.  It bounced rather unimpressively and is on the way down again to settle who knows where?  Bad for cat-lovers, good for mortgages.  Stay tuned!