TO LOCK OR NOT TO LOCK THAT IS THE QUESTION:

Quite frankly, it's an oversold market. The FED whispered he might move up the easing process IF IF IF the economy continues on its slowly recovering path. Will that be the case, not so sure still at 7.5% UR, yes consumer sentiment 2 months in a row is great, but look at the fine print and the main source of the polling are wealthier people. I feel there are a lot of bumps in the road ahead and a slow crawling recover is at best, due to not only our job loss, but the rest of the world, Europe still has major UE the UK just announced the are at 7.9% other countries are in the 20's %. China is slowing down, emerging markets also are slowing in LAR and Mexico. So the reason why we are oversold is that Bond traders can be on the wrong end with billions of dollars on the line, so the FED's whisper ad a few good reports in a row with a higher stock market was too much to overcome.

Now we have been here before, but now quite this far along the 10 yr. bond which trades as close the MBS FNMA 30yr 3.0 coupon but to 2.06% on the 10yr bond which is easy to follow on yahoo finance page TNX is the symbol. MBS markets you would need a subscription. But we were up to 2.06% on March 6th of this year and earlier this May 2nd we were down to 1.63%.

What makes this time different? The 10 yr. bond closed at 2.13% yesterday and today opened at 2.15 and a half of year is approaching and the FED is preparing us for the future of higher rates, by indicating that the QE or government buying of MBS/Treasury bonds is coming to an end sooner than later since the economy is on the right track, OR is it. Well no one knows for sure, but the last 3 weeks sure make it sound like its on its way.

I'm not so sure it is, but it will be a slow grind back to rates in the mid 3's and that is only if we get Bad economic news in the US and abroad, if all continues as last couple of weeks, then the 3 floor might be a think of the past and the 4 floor is the next stop or rates in the 4's that is

In closing I feel the new bottom will be 3.75% on a 30 yr. fixed and be prepared for peaks as high as 4.5% in the next 12 months, Good Luck to all