Ever since the abundance of data last Thursday morning, the general expectation has been for a decrease in volume and directionality heading into tomorrow's FOMC announcment.  So far, that's what we've gotten, although there have been some brief Europe-related spikes.  You can actually see the trend of "lower highs" in 10yr yields and how the promise of the Greek conference call got yields to break above that trendline overnight.  You can also see how it was tested extensively this morning (the yellow line breaks above the red line and bounces on it several times) before finally breaking back into a consolidating range of lower highs and higher lows.

Volume is telling us the market is more or less where it wants to be and without a big uptick in volume, the day is effectively over.  Think of this like a small bit of scrambling to get lawn chairs on the street for the parade that's about to pass.  Looks like everyone has staked their claims now.  Zooming out to the slightly longer term, we can see that yields are on the lower, more aggressive end of their range.

MBS, not surprisingly, continue to grind against their upper limits at the "concrete ceiling" levels, giving the impression that they COULD move higher, but don't seem ready to do that just yet.

Depending on what's announced (or not announced tomorrow), the stock lever could play a role in how bond markets trade.  In looking at last few months of the S&P chart, it looks like stocks are generally moving sideways in a wide range between the low 1100's and the low 1200s, but for the past week have been bullish, perhaps hoping for something from the FOMC that would allow a break of these higher levels.

And these levels are more than just coincidental.  This is the FOMC announcement from which stocks are likely hoping to hear something more than a mere announcment of Operation Twist.  Maybe even a QE3?  Bottom line is that the S&P Index is in striking distance of moving back above some very long term, very meaningful dividing lines between "healthy" and "not healthy."  Current levels separate the 2011 and pre-crash 2008 from everything else, and we're right on the edge.  Whether or not this pivot point is broken definitively tomorrow could play a big role in whether or not 10yr yields are able to stay in the high 1's.