• MBS searching for resistance at 99-05, 10yr yields at 4.0
• Friday and Today = 2 of the 3 lowest volume days since January
• Stocks pause at technical levels
• All eyes still on auctions

The bad news is that bonds are still at or near their weakest levels of the day, but the good news is that some semblance of support looks to be in effect, as expected, at 4.00.

In the 10yr chart below, we can see good evidence for a lack of conviction amidst low volume as the 10yr merely took the cue from positive econ data to bump from one technical level to another.  Today should close as the third lowest day of volume in 10yr futures since January.  Led by 3/08 and the champ: this most recent Friday.

Stocks have stalled a bit with the S&P at 1187.32

Zooming to a super long term view on the S&P, we see a really solid pivot point indicated by the red line.  The chart covers so much ground that the human eye might not detect this, but as I gathered the specific numbers from the various highs and lows touching the line, we'd broken most of them as of today, except where the red line provides support in early october 2005.

So that which capped us out today was the same closing price from 10/10/05.  Interestingly, on 10/12, the index hit 1178, which was our last closing price on 4/1.  If those technical rungs remain in effect, the next resistance suggested by mid 2006 lows would be at 1223.  But that would require some poor auction results and other economically bullish econ to materialize quickly.  We can't emphasize enough that we still haven't seen enough volume or participation to get a true sense of trends.  A correction is as much of a possibility as meaningful breakout of 4.0 in 10yr treasuries.