Of course there's plenty of time left in the day, but generally not much of that time is actively traded or especially volatile.  And though we did see a 2 tick drop appear out of thin air after the Fed released their MBS purchasing activity for last week (more on this later), it has since been recovered.  So is it too early to assume that we're seeing YET ANOTHER narrowing range that hones in on technical price levels?

You decide...

It might not be as clear what the MBS triangle is suggesting, but basically, these are both "status quo" points on the long term charts, 3.5 on the 10yr and 100-28+ on MBS.  If history is any indication, these levels may be broken before the close.  But even if tsy's were to end at say, 3.48 and MBS at 101-01, the message would be more or less the same: prices return to just inside the long term range.  "Status quo, but ready to weaken if provoked!"

I heard something about biggest rally in stocks since July...  We'll undoubtedly be showing that big bounce off the technical levels mentioned in last night's close.  Considering the fervor of the rally, for bonds to stay in the range say something like: "we might have weakened a bit on the day, but we're not ready to give up on the uncertainty yet..."  Indeed most other historical epochs would have seen something worse than the mere 7 tick loss at  which we currently stand.

MBS current coupon is at 4.3295.  Spreads to 10yr at 83.395 bps