(update at 2:08pm: losses accelerating, reprices for the worse more likely.  Sentiments on MBS vs. Lender market from original 1:55pm time frame remain valid.)

original commentary (1:55pm) :

This is one of those MBS UPDATE's that was conceived as just that: a simple update on how the post-auction trading is going.  Shortly before beginning to write, we took the short move down from 100-07 to 100-03.  There are several ways to interpret this, all of them valid.  Unfortunately, there are several different eventualities for lenders as well.  More likely than not, this is not a big enough move to warrant reprices, but if your lender has shown a predisposition in the past to base reprices off the movement from the last high as opposed to the overall movement of the day, it's not impossible to see reprices either. 

Other considerations:

• remember that you are looking at a two day chart.  If we zoomed this in to a one day chart, things would look a bit more balanced.
• Still very much in the range even in terms of a downtrend from yesterday.  In fact, haven't even touched it since the auction.
• Look where the downtrend is leading (follow the red line... that's right!  would you be so surprised?)
• still above par on the day.
• tsy's encountering friendly resistance at 3.47 (very pertinent recently)

My bottom line is this.  Speaking for the MBS market as opposed to the mortgage market, no big deal...  blog post not even necessary...  no reason to doubt the range or technicals...  etc.. etc...

Speaking for the mortgage market, you might see a few lenders throw out a reprice here.