Thursday - December 26, 2013, 10:40am ET

Current Trend Direction: Attempting to stabilize

Float/Lock Bias:Floating with prices just above supportCurrent Price of FNMA 4.0% Bond: $102.81, +9bp

Mortgage Bonds begin, what will be a very low volume trading day, near unchanged levels. The 4% coupon is clinging to support at 102.66, which was the low hit back on September 18. We are watching this carefully, as a convincing close beneath this support would likely bring on more selling pressure.The Labor Department reported that Weekly Initial Jobless Claims fell by 42K in the latest week to 338K and below the 350K expected and the largest weekly drop in 13 months. The numbers have been jumping around in the past month due to seasonal factors. The four week moving, which irons out the seasonal factors, rose by 4,250 to 348,000. The recent numbers have been distorted by the holiday hires and fires and will last until the beginning of the new year.Over in foreclosure news, the Federal Housing Financing Agency (FHFA) announced late Monday that Fannie Mae and Freddie Mac have saved more than 3 million homeowners from foreclosure since the start of conservatorship in September 2008. The housing sector had a good year in 2013 - thanks to QE3 - but with longer-term rates having adjusted a bit higher, it will very hard to replicate 2013's double digit price gains this coming year.Technically, Bonds are trying to remain above what looks to be a pretty good floor of support. At the same time, the Ten Year Note Yield remains just below the psychological 3% level. Floating new transactions, very carefully, looks wise.

Joe Shamie NMLS # 241432

First Choice Loan Services NMLS # 210764

First Choice Bank NMLS# 177877

866-970-3400 x-5135

jshamie@fcbmtg.com