5.5 tightens up and then sells again....

After the post FOMC minutes 7/32 (7 ticks) sell off the 5.5 FN MBS has gone sideways in a range between 100-07 and 100-03. These price levels are coincidentally the 38% and 62% intraday retraces. A breakout over 100-07 will meet immediate resistance at 100-09. A sell-off through the 100-02 will look for support at 99-29 (the low for the day).

If you are a short term floater we must remind you that the 5.5 FN MBS is trading above our long term 100-02 resistance level. This downward trend has held firm 5 times since 9/8/2008.

Although a positive breakout is possible we are sticking to the current downward triangle trend until we see proof of a possible trend reversal. In this day trading environment taking profits off the table is never a bad idea.

As I am finishing this post the 5.5 FN MBS has just broken through its support 100-03 price level. If you received mid-day positive reprices we are nearing a price level where those will be taken away. Short termers should consider locking. Next supporting price level is 99-29

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