We're bringing you several graphs and didn't want you to get cold waiting for the MBS Train.

So here's a little something to keep you warm until we get the rest posted.  We're looking at a 2 day intraday chart on 5.0's, currently the most heavily traded coupon with 4.5's rapidly catching up.

Lines, lines, everywhere the lines...

We spoke yesterday about Fibonacci Speedlines and/or Retracements.  We've denoted on the chart the highly relevant 38 and 62% speedlines.  You can see a striking internal trendline from yesterday.  An internal trendline is a line that can be drawn "through" the price action of a curve so that it connects as many highs and lows as possible.  We can see the late morning prices bounce off 62% as a ceiling, and then several times in rapid succession in the late afternoon as a floor.  The internal trendline or speedline goes back to "trend analysis 101" concept we've discussed in the past: A firm ceiling, once convincingly broken, becomes a potential floor.  This certainly happened at 62% yesterday, however, we hit a ceiling at the 38% line on the way up.

The yellow line is another internal trendline that connects a significant portion of highs and lows from yesterday and this AM.  Once we deviate from that line more than we did late yesterday afternoon.  It may be time to lock up the short term deals, but we'll asses that as necessary.

Considering that the purple verticle line is the break between yesterday's and today's session, we can see that we've broken convincingly through 38% and indeed it has served as a reasonable floor so far this AM.  The next levels of overhead resistance come from a slight channel created by the 8 and 4 day moving averages (which are equal today, hence one magenta line) and the 101-00 level with it's psychological as well as fundamental significance.

More analysis to follow, be on your toes though.  Today is the beginning of the 48 hour settlement, aka "the roll."