Things began in pretty ugly fashion this morning.  MBS came in the door weaker than yesterday and fell further after the Jobless Claims data.  At that point, Fannie 3.5's were actually below the lower line of their long standing trend channel.  In technical analysis jargon, that would constitute a "test."  But as you can see in the chart below, the test was rejected and MBS moved back into the trend channel.  And what's more, as if to confirm that the trendline we're watching is indeed important, prices bounced perfectly on that line several times since:

Keep in mind, however, simply because trading action is confirming the technical significance of this trendline DOES NOT, in some way suggest that we should EXPECT that line to be a supportive floor.  Rather, it let's us know that what has been an uptrend may be shifting sideways or reversing when and if the line is definitively broken.  So although this case isn't closed, it's a perfect bounce so far today, especially when viewed on the hourly chart first used to present the trend channel.  All we can do is hope that it will hold--an eventuality likely dependent on tomorrow's NFP.