Different day - same story.
This week's round of macro-economic data stands a very good chance of being completely overshadowed by trading action in the stock markets.
First-quarter earnings "season" kicked-off yesterday after the stock market closed and will accelerate in intensity over the next couple of weeks. Stock investors have already priced in solid earnings reports for the majority of Corporate America - so if the actual earnings match or fall short of expectations -- investors will likely register their disappointment by pushing stock prices lower.
From a technical perspective it appears that both the DOW and the NASDAQ are on the verge of staging a fairly sharp downward correction. In my judgment the DOW will probably find it difficult to move much higher than 11,100 while the NASDAQ is likely to run-out-of-steam as it trades in the 2450 to 2470 range. If a trend change favoring lower stock prices does not manifest itself this week - it will by the week ending May 1st, 2010.
If this assessment proves accurate, a significant amount of the capital fleeing deteriorating conditions in the stock markets will almost certainly seek the safety of Treasury debt obligations and mortgage-backed securities - a condition that will in-turn prove supportive of steady to perhaps fractionally lower rates.
Be very, very patient here and pay close attention to price target objectives. The potential for some rather wild price swings in the mortgage market over the course of the next couple of days is high.
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