Thursday - December 12, 2013, 12:30pm ET

Current Trend Direction: Sideways

Advise Your Clients:LockingCurrent Price of FNMA 4.0% Bond:$103.31, Unchanged

Jobs - now you see 'em. Now you don't.In the previous week, Weekly Initial Jobless Claims fell to 298K, the lowest level since early September and most likely influenced by the Thanksgiving holiday. But last week, claims surged by 68K to 368K and above the 315K expected, the highest level since early October. The labor market recovery continues to be modest and uneven.

Throw in higher Retail Sales for November at 0.7% and above the 0.6% expected and we have Mortgage Bonds indecisive and trading modestly lower.

On the heels of yesterday's weak 10-Year Note $21B offering, the Treasury will be unloading $13B 30-Year Bonds at 1:00pm ET. A sloppy auction could ding Bonds again today.

In foreclosure news, RealtyTrac reported that foreclosure inventory fell by 15% from October to November and up 37% from a year ago. The foreclosure problem continues to improve from the abyss seens a couple of years ago. Foreclosure activity includes default notices, scheduled auctions and bank repossessions.

Technically, the 4% Bond has slipped below support at $103.48 and looks headed towards the 103.06 level. G-fees, the Mel Watt confirmation, the Volker rule, the final HUD announcement, better Jobs report, fears of tapering...and couple that with the Head and Shoulders bear market pattern that we identified last week, and you have reason to continue locking, as the path of least resistance remains lower.

Joe Shamie NMLS # 241432

First Choice Loan Services NMLS # 210764

First Choice Bank NMLS# 177877

866-970-3400 x-5135

jshamie@fcbmtg.com