Posted To: MBS Commentary
High-momentum trends can pause, reverse, or fizzle . More often than not, the early stages of all three of those options look exactly the same. It happens after a significant move in either direction (significance can depend on time, distance covered, and preceding circumstances, among other things). The move first begins losing steam and then grinds indecisively sideways in a narrower range than the trading days that comprise the trend. In the case of a reversal , the move back to previous levels can be surprisingly swift. The same is true in cases where those sideways days merely happened to be a pause (or ‘consolidation’) in a longer-term move. The “fizzle” scenario is boring, and never really re-commits to either side of the trade. US Bond markets (and even European markets…(read more)
Via:: MBS Day Ahead: Plenty to Hope For, but Little to be Sure About
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