Shortly after hitting their best levels of the day, bond markets retreated to recent pivot points both in terms of 10yr Treasuries and MBS. We've noted a drastic increase in the level of direct correlation between stock movements and Treasury yields since 11:30.

During that time, S&P's have run up over 1400 for the first time since mid 2008. 10yr yields aggressively tested their 2.29 pivot point, but thus far, are holding their ground and have bounced back into 2.27's. MBS are similarly holding what is shaping up to be their most significant ledge of the morning at 102-06. These are the two levels we'd watch for shifts in negative reprice risk!

In other words, if Fannie 3.5's drop below 102-06, reprice risks are likely increasing. The bigger the drop and the longer it's sustained, the greater the risk. Tangentially, we can keep an eye on 10's as potential cue-givers for MBS. The latter will greatly appreciate any shows of support, a fact that's evident at the moment as Fannie 3.5's rally to 102-11 after 10's make their first big bounce off the 2.29 ceiling.

So we're in good territory once again after little scare in the middle of the noon hour. Unfortunately, volatility should continue to be more of a rule than an exception. We could be bouncing right back in the other direction, by the time you read this... Best to know the important support/resistance levels and set your automatic alerts accordingly and/or keep an eye on prices as they change.

We've seen several positive reprices already this morning, but admittedly those were mostly due to the lenders in question coming out of the gate with their tails tucked between their legs and perking up a bit to see we weren't selling off again.

Even so, other lenders remain who went through similar motions this morning and have yet to reprice positively. Now that MBS are breaking through a pivot point at 102-12 (currently up 7 ticks at 102-15) and 10yr TSYs are broken lower through 2.26+ currently at 2.256, the longer these gains hold or are improved upon, the more likely this will draw out additional lenders who priced earlier and more conservatively, for positive reprices.