Lowering Rates - Another Sign of Deflation

lowering mortgage ratesSo far, following a brief red opening, The Dow shot up pretty quickly to the +50-70 range, which it has been trading at throughout most of the day. Mortgage rates dipping in the low 5% range, encouraged investors that the recent spike in yields may have just been a scare. However, many people are overlooking the real possibility of deflation becoming a real problem, which we are seeing the storm clouds begin to collide.

If indeed deflation is upon us, then we can expect some decreasing mortgage rates. In fact, I will be looking to refinance any existing loans I have during this period, as I worry for our next stage of inflation jacking up the rates.

You can see the signs all around us. Commodities are continuing to struggle and come down in price, as is agriculture. Gold is weakening after its recent jump in price and the dollar is slowly inching its way back up, showing stronger signs. In fact, a good hedge of deflation is considering UUP, which I am at this point, which is a bullish ETF for the dollar.

We'll see how we close out today. I expected a bit of a rebound, but I don't see us taking off as we have in times past, but you never know, especially with PPT out there. There's been some pretty strong selling resistance today that has matched the buying, which is expected at this point, and which was talked about in yesterday's Market Trend video. So far, so good. Happy Trading.

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