Fannie Mae 3.5%

Comments: The Fannie Mae 3.5% bond hit our previously mentioned price target of 103.00 this morning. It has hit this price target without the benefit of a "Risk-Off" trade in equities...but this "RIsk-Off" trade may be fast approaching. Technically, there is a good argument to be made that equities are completing a counter-trend rally going back to the October 2011 lows, and completing this counter-trend rally essentially right now

. If so, the next leg down should be extremely violent...I would expect money to initially flow into Risk-Off trades so expect lower 10 Yr Treasury yields and better pricing on mortgage rates.

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