Daily Market Watch for 11-19-08

For the 11th straight day Mortgage Bonds have touched the 200-day Moving Average. After a higher open, prices have bounced around and are now trading just above this important level.

On the news front, Overall Consumer Price Index fell a record -1.0%, thanks to an 8.6% decline in energy prices. Housing Starts also fell 4.5% in October. And yesterday, Mortgage Bonds bounced higher after news that giant hedge fund Paulson & Co. has started buying beaten-up Mortgage Bonds in its Advantage Plus fund.

The 200-day Moving Average is an amazing level to watch. Mortgage Bonds dipped below this level earlier today and now have settled right above this important floor. I recommend carefully floating for now, as we watch to see if Mortgage Bonds can build on the recent positive momentum....More