YOUR Mortgage Minute -- May 28, 2009

Good Afternoon,

WOW! What a day yesterday was!

After losing a staggering 363 basis points since last Thursday, Mortgage Bonds are trying to regain some ground. Yesterday, Mortgage Bonds had their worst one-day performance since October, due to the added supply in the market from the Treasury auctions and the increased number of refinances.

In other news, Initial Jobless Claims were better than expectations, but a higher revision to the prior week's reading offset the slightly positive headline number. Durable Goods Orders in April also came in a bit better than expectations, while New Home Sales were just under estimates.

The recent price declines have pushed Bonds into an 'oversold' state, which means prices could be ripe for a bounce or reversal higher. However, Bonds will have to break through several ceilings of resistance in the process. I recommend floating to see if Bonds regain some footing, but be ready to lock if Bonds are unable to do so, because rates could turn higher mighty quickly. I will certainly keep you posted as things develop.

I hope that you enjoy the rest of your day. If there is ever anything that I can do for you, please let me know.