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Two Ways To Play: Fed Raises the Roof


Strengthen your portfolio in good times and bad.


Homeowners looking to refinance their mortgages are probably breathing a sigh of relief. According to Bloomberg, US mortgage rates dropped the most in almost 7 years after the Federal Reserve announced it would buy more debt - $500 billion in agency debt and up to $100 billion in direct debt from Fannie Mae (FNM) and Freddie Mac (FRE).

According to Bankrate, the average rate for 30-year fixed-rate mortgages dropped to approximately 5.5% yesterday, down from about 6.38% the previous day.

Neal Soss, chief economist at Credit Suisse, said home resales were hung up because of high rates - and because mortgage money had been scarce. He believes the action by the Fed "may hasten the day when we finally find a bottom in housing."

From the Bull Pen: Stocks have been on a roll and it's been showing in tech. Bulls can consider a play in Research In Motion (RIMM). One can continue to use the $40 level as an area for sell stops.

From the Bear Cave: It isn't wise to fight this tape. Housing bears can consider the downside in the homebuilders ETF (XHB) if and when it can reach $15 overhead resistance.

Have a great Thanksgiving!

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No positions in stocks mentioned.

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