Market Update February 20

We have started the morning strong today, florida mortgage rates and mortgage bonds are trading higher, as stocks remain under selling pressure. Yesterday, the Dow fell to a six year low, below a level it had first surpassed back in 1997. Wow – not accounting for dividends, the Dow is at a level equal to what it was twelve years ago. You’d have to go back to 2002 for the lowest intraday level on the Dow of 7197 to find a potential floor of support. We’ll be watching this level closely, as it’s very possible to be tested today. If Stock prices bounce higher off this level of support, it could ignite a overdue rally. However, that would be problematic for Bond prices, as dollars will flow into Stocks to chase the rally.

The strong ceiling of resistance overhead continues to keep a lid on Bond pricing gains. Even weak Stocks haven’t helped Bond prices break above resistance. This doesn’t mean that prices can’t improve down the road, but it still may be prudent to lock mortgage rate transactions and protect any modest gains, especially with the aforementioned dynamic in Stocks.