So far, we've enjoyed a fairly stable late morning and early afternoon despite fluctuations in the treasury market.  After this morning's selling and subsequent rebound, we crested a level of 102-15 in the 4.5 coupon and that has held firm as a technical floor fo over 3 hours.  In the past few minutes, treasuries ticked down fairly aggressively, and although spreads remain very strong today vs. tsy's, the selling is pulling down MBS a tad.  The price curve so far this morning does not lend itself to profit taking, so that is not a concern here. 

Here's a chart that shows the "tech support" floor just barely being violated.  We are currently dancing in heavy volume right around the floor level and wouldn't consider it violated unless we tick down to 102-13 for more than a few minutes.  All of the above supposes that anyone still thinks MBS is related to how lenders are pricing!  For the numerous previously discussed reasons, MBS price, in the case of many many lenders, is almost entirely disconnected from rate sheets for the first time in a long time.  So reprices for the better and worse are at the whim of lenders, which is rough for us since there's no way to tell without calling up and asking, how their funding lines, personnel, and secondary appetites are doing.  Hope is on the horizon with the roll.  The roll between January Coupons and February Coupons will be completed by the 13th.  That should (SHOULD) allow some lower coupon originations to the extent that personnel allows and that a few mavericks are willing to jump out in front of the market. 

Here's your chart: currently at 102-14+ so no panic from a price perspective, but again, anyone's guess for the esoteric imeasurables discussed above: