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Thursday, November 5, 2009

How will the market react? We don't see how Stocks could improve with a 10% handle on the Unemployment Rate being announced. And should Stocks move lower, Mortgage Bonds will likely benefit - however, any pricing improvement may be modest. A look at the chart shows prices moving sideways within a range between strong overhead resistance at the 25-day Moving Average and support at the 50 and 200-day Moving Averages. We feel Floating into the report is a wise balance between the potential gains and losses at stake, but don't expect huge improvements in pricing unless the report is far, far worse than even our expectations.

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