• No material change since 10:30AM
• MBS 4.5's unchanged on the day at 101-07
• 10yr note 4bps higher on the day to 3.72
• Stocks were up, down, up, closed flat
• No data tomorrow either, then 3yr note auction at 1pm
• Fed Evans at 930am
• Big Picture: something's gotta change, or long, slow, grind continues.

I wanted to show you the same chart from the Afternoon notes, now updated for the past few hours for the sake of comparison, but I had to send it off to whatever company that is that prints those little activities on my kid's dinner menu where he's supposed to find the differences between two pictures.  They heard about those two MBS charts and were thrilled at the possibility of just putting out one puzzle this year that would keep everyone guessing as to whether or not there was even ONE difference, let alone the three differences required to get the extra corn dog.

So let's mix it up a bit.  Nothing to talk about today (really), so we'll look further behind for some more context, and of course cast an obligatory glance toward the upcoming week.

Here's today in the context of a broader time frame.  Note the competing trends taking shape over the last 2 sessions and the apparently strong support just under 101...

Whether the auctions are well received or not, it's a slightly better chance for a break to the downside given that some of the concessionary treasury-specific weakness may be cleared up as this auction week progresses.  In other words, bonds would have to be pretty strong overall for MBS not to get called back a bit.

Ongoing losses would be in line with technical trends from both 2009 and the previous session.  The chart below tackles both, with the MBS portion speaking to the longer term and the treasury yield portion speaking to more recent developments.  For MBS, we go back to a chart I'll keep revisiting for as long as I keep being right about it from last November...

And though the topside resistance has seen a few breakouts here and there, the general trend remains intact which you'll see in a moment.  Then, when you get to the bottom portion of the chart, it coincides with some  some competing trends we highlighted last week in 10yr note yield.  So far this week, the apparent "bounce" off lower yields to higher yields has some more support.  

In treasuries, it may be more telling than anything if yields collide with that well-developed top line and again fail to move higher.  Conversely, if we break out meaningfully, it could indicate the technical acceptance of that shifted trend.  Even if we want to look at things more "horizontally," a clear range has emerged between (roughly) 3.6 and 3.8.  Guess which one we're more likely to test first...

Futures also are showing a highly likelihood that bond yields are predisposed to move a bit higher for the simple reason that there is a well established range slightly below (in PRICE) recent trading.  Even if this isn't any sort of long term home for 10y futures, it seems more likely that they'll spend time around the bullseye than move back into the upper range.

But this all depends on auction results, doesn't it!  In addition, while the above chart does seem to argue for a drop into a slightly lower range, even NFP volume was as high as the days that saw prices move into the upper range.  So with the uncertainty of auctions, there's plenty of counterpoint to the bearishness in the short/medium term.  Long term, it will continue to be true that "something big" must change about the current prevailing sentiment, no matter how uncertain and unsupported it might seem at times, in order for "2009 rates" to be a reality in 2010.