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MBS Day Ahead: Stocks and Bonds Both Waiting For an Opportunity

Posted To: MBS Commentary

Perspective is always important when considering market movement. Most decent charting software or any responsibly-created custom chart will scale the charted line to fill up most of the vertical space. The only downside of this practice is that over short time horizons, it can seem like there's a ton of volatility when there's, in fact, essentially none. Case in point, check out this wild volatility in stocks and bonds over the past 2 days: Then check out the longer-term chart of the same 2 lines filling the same amount of pixels on your screen. The ranges in the previous chart are contained in the small rectangular highlighted sections below. Long story short, yesterday and today have been inconsequential in the just-slightly-bigger picture, but there's still information to be…(read more)

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