Ascending Triangle

Ascending Triangle Look for the approach to the 44.75 price, if there is a lot of volume push then break to new high.

The new FHA programs.

Currently the FHA program has no declining value adjustments at the government level, has low down payment and loan to values as high as 97%, cash out refinances allowed to 85%, rate and tern refinances to 97%, total down payment can be a gift, no credit score requirements, no income limits or sales price restrictions, FHA loans are assumable, seller concessions may be as high as 6%, no cash reserves required, non-occupying borrowers are allowed with blended ratios (SFR only), non taxable income (including child support) may be grossed up, and bankruptcies allowed after 2 years. We'll see if investors continue allowing all of these with $729k loan amounts, or if they add "overlays" to restrict underwriting.

This week's economic news.

The yield on the 10-yr is up to 3.86%, and mortgage prices are worse by .250-.375. The only news due out today is the February NAHB housing market index, expected to be unchanged at 19. It measures the general state of the single family home market, and a reading above 50 signals a "good" outlook while a reading below 50 signals a "poor" outlook - it has been below 50 for almost two years. Tomorrow we have the release of the FOMC minutes from the Jan 29/30 meeting, along with the January Consumer Price Index report and Housing Starts. The CPI is expected +0.3% in the overall index and +0.2% in the more important core data. Lastly on Thursday we'll see the Leading Economic Indicators (LEI) report for January. It is an attempt to predict economic activity over the next 3-6 months, and is expected to show a 0.1% decline, meaning that economic activity may slow slightly in the near future.

Ben testifies, Market weakens, bonds weaken

Why have rates been heading higher the past few days? Is the economy really doing better?
After 9 days on a run down, the market rests, gains a little strength and then heads lower.

Overnight in Tokyo, US Treasury prices were lower, and rates higher, after a stronger-than-expected GDP number from Japan , which caused Asian stocks to rally. This followed a day in the US where the curve continued to steepen, which has continued this morning.

In the US yesterday, we had a strong Retail Sales number, followed by this morning's Trade Balance numbers ($58.8 billion deficit, slightly narrower than expected) and Jobless Claims (-9k from 357k to 348k, and continuing claims steady, but at their highest level in 2 ½ years). All eyes will be on Fed President Bernanke when he testifies before the Senate Committee later today. Oil prices are on the rise, back into the low $90/barrel range. Here comes $100. The 10-yr has moved about 3.75%, and mortgage prices are worse by .375.

Also UBS mentioned they have another 27Billion in Subprime to look at writing off......

SP 500 At the close feb 12

And using the same lines as before the close. You can also see the descending Triangle in the middle and on the third approach the volume push through that takes the market to close the gap and rally 10 points.

What a day.

Good news, bad news SP 500

The markets had a good start to the day but finished with a drop that left the market 9.75 above open.

FED save a few foreclosures

is an interesting article on 6 lenders to get together for a 30 day reprieve for those that qualify.

Obama also gave some interesting news for those of us who pay capital gains tax. He will be raising it from 15% to 28%......HMMM.

Market is still posing itself for more of a rally. Could be short lived. We will see.

Tomorrow President Bush is likely to sign into law the recently passed economic stimulus bill. It raises the limit on the size of mortgage that Fannie Mae and Freddie Mac may purchase and that the Federal Housing Administration (FHA) may insure. In both cases, the increases are temporary and apply only to loans originated by the end of 2008. If signed, Fannie and Freddie may purchase loans up to 125% of the median home price in an area, up to a national limit of $729,750.

FHA limits, and I assume VA, would see the same increase, and the floor on FHA limits would be raised so that larger FHA-insured loans would become available in low-cost areas.

23 support to test, Yesterdays level SP 500

Let's watch it test the 23. Probably after hours, if alot of momentum then maybe to 19.

We shall see.

It also seems this market is hinging on bonds and their volitility.