Posted To: MBS CommentaryWith yields touching the lowest levels in more than a month yesterday, there are two distinct cases to be made for the path ahead. In the more pessimistic case, those low yield levels fall in line with the bottom of the range seen from late June through late July. They coincide with technical indicators that are increasingly suggesting bonds are overbought (i.e. susceptible to bouncing off a floor/resistance level). Optimists would be quick to point out that many a great little rally has begun with technicals prematurely suggesting resistance. After all, technicals aren’t magic tea leaves–just another way to consider possible future outcomes. Especially clever optimists could also point out that other technical overlays could make entirely different cases. For instance, if we compare most…(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.