Phil Grossfield's Blog

Deflategate II.  You really think they’re cheaters?!  After talking to many of you yesterday I know there are a lot of opinions…BUT I DIDN’T GET YOUR EMAILS!  Resend them!

Deflategate I yesterday continues here…  I will say this, I know Brady and Belichick have been accused of cheating before, but c’mon…there’s no way!  Maybe it’s because I’m naive…I like to believe people are innocent.  When OJ was accused I defended him for the longest time…my wife was p.o.’d at me for even considering his innocence.  And when Clinton looked the camera (me) in the eye and said he didn’t have sexual relations with that woman, I believed him (but I also didn’t care).  And when my broker was accused of a straw-buyer scheme in 2007, I initially defended his honor until I investigated and found out the truth.  I guess that’s why I intended to be a criminal defense attorney before I changed trajectories.  I guess I want to believe the best in people.   But Brady and Belichick? C’mon!

My Market Update – 01/27/2015

The 30-year Fannie Mae bond is trading up +20bps since yesterday’s close.  Generally a lender’s pricing improves when the bond is being bought.

The Fannie Mae 30-year bond is dancing on a ceiling of resistance.  That means traders are buying bonds but start selling it off when it reaches a high price (the ceiling), presumably to take gains.  That’s why they call it a ceiling of resistance …it influences traders to stop buying.

The ceiling is a line based on past trends in buying and selling…it helps traders decide if they should keep buying or stop and maybe even sell.  Think about it…if you knew your bonds had reached the highest price, would you keep buying?  Hell no!  This of course assumes you believe in buying low and selling high, and if you don’t, you need to rethink your career.

So, the question is, will traders keep buying and push the bond over the ceiling into another floor of trading?  I think not, at least not today.  It’s my opinion that you should consider locking if you’re under the gun and have to decide quickly what to do.  If you have time to float, then you might want to see what the remainder of the week brings.  I hope that’s helpful…