• FN 4.5's currently a tick higher on the day, but down 4 ticks from opening levels at 102-06
• 10yr notes are 3bps lower this AM, but 2 bps higher than opening levels at 3.20.
• long story short, bonds opened stronger, and have been weaker ever since.
• trading ranges are consolidating in all markets and are set to break out as soon as they're given an exuse

Remember the last few weeks?  They've looked like this:

As you can see, after reaching certain levels, bond markets are taking a moment to see if these levels can be confirmed, or rather, if they'll be able to spend any more time on the bullish side of the two lines above (OVER the MBS line and UNDER the tsy yield line).  Of course rate sheets depend on MBS prices, but keep in mind that treasuries are the better indicator of general sentiment and direction.  With that in mind, while it's obviously a good idea to watch for a break under 102-03 in MBS, I'd also be quite interested in 2 support levels in the 10yr:  3.24 and 3.27.  The former has contained most of the high yields i recent days, and the later is the "outer limits" high water mark.

The process of markets PREPARING to either confirm this range or to retrace back into weaker territory is evident in the CONSOLIDATION patterns that AQ mentioned this AM.  All that means is that, with respect to themselves, the lows and the highs are getting closer and closer together.  A classic example of a technical overlay that illustrates this phenomenon is the "triangle," and indeed, they are everywhere today.

So until one side or the other is meaningfully broken and confirmed, we're kind of just waiting for that to happen and take it from there.  technically, and considering fundamentals as well, it does appear slightly more likely for 5/21's yields to have been the lowest we'll see.  But more important is actually observing which side breaks and drawing conclusions from there.  Anything can happen.