This week was very volatile in the mortgage rate front. We started the week with rates at all time lows, then quickly rates rose by Friday. With the better than expected jobs report, with only 11,000 lost for Nov, the Treasuries sold off on all parts of the curve. Friday, stocks futures started up 120 points directly after the announcement, market opened up 1.5%, then as the dollar started to rise, commodities and stocks that follow started to fall. Oil then retreated and the market ended flat. My favorite stocks here would be TBT – short treasuries, and DTO, short oil. DZZ is worth looking at as gold trades starts to unwind. Key of the trading next week will be watching the VIX, which ended at 21 on the cash. Also look at GS and AAPL as they are good market indicators of what the whole market might do. If profits are recognized for the year, I'd start hedging or sell. Beginning 2010 will be interesting as people will try to guess the timing for Fed to start to retreat some liquidity from the market. Fed futures rose from 40% chance of raising rates in June to 70% on Friday.
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