Candlestick Charts

WELCOME, MY REALTOR FRIEND!!

Thanks so much for reading my weekly rate update!  Let's get you up to speed as to what all these charts mean.

What you're looking at are Japanese Candlestick Charts showing the price action of a popularly traded mortgage backed security (MBS).  MBS are the bond class that dictates the movement of mortgage interest rates.  Each candlestick represents a period of time (30 minutes each for the 5-day chart and one day each for the 3-month chart).  If the candlestick is green, that means during that period of time the price went up.  If it's red, that means the price went down.  The candlestick itself shows the difference in starting versus ending price during that time period, while the little wicks (lines) on either end show the entire range of trading that took place.

Since the price of a bond moves inversely to the yield, the easiest takeaway is:

UP/GREEN = LOWER INTEREST RATES

DOWN/RED = HIGHER INTEREST RATES

We can look at the trends and the moving averages (represented by the three lines on the 3-month chart, blue is the 25-day, red is the 50-day and green is the 100-day average) to help understand how the market has been moving and hopefully give us a foundation to guesstimate where it might be headed.  Of course, I am more than happy to speak with you about this live time to make sure you're able to understand and explain it to your clients.