MBS Day Ahead: Levels to Watch as Bonds Continue Consolidating (Hopefully not Correcting)

Posted To: MBS Commentary

"Consolidation" has a bit of a different connotation when it comes to financial markets (as opposed to the dictionary definition of "the process of making something stronger or more solid"). As far as financial markets are concerned, consolidation is what follows a sustained move in certain direction. This tends to take the shape of "correction" (a push back in the other direction) at first, but can be considered a consolidation if the push doesn't take the security in question too far back in the other direction. In that sense, "a push back in the other direction, but not too far" could be seen as legitimizing or strengthening the case for trading levels having just reached whatever levels the recent trend helped them reach. If we think of a mountain…(read more)

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Source: Mortgage News Daily

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