So you know by now that I’m big on charts and cycles.

My call for lower rates in December was in large part due to those factors. Today’s data gives real for pause in terms of the strength was saw, but I’d argue were are likely looking at a momentary bump or some seasonal anomalies.  

So let’s not get the deck chairs out just yet. We’re seeing support around 2.52 right now, and as I indicated, I feel like the range is still intact for now.  There is reason for near term caution though. As I indicated last week, we certainly want to lock at the lower end of range and while I’d normally say float at the higher range, I might ease that off a bit until roughly 3/17 as a breakout is absolutely possible.

The good news is that in every year we went on to see better levels, even if only slightly and for a brief period.  

Here are charts for Fannie 3’s the last 5 years which clearly identify the February to March pull backs I’m highlighting:

2012 – almost 3 points

2013 – about a point

2014 – about a point

2015 – about 150 bps

2016 – about 150 bps 

-Philip Mancuso