A bit of a break from the recent norm today as the primary market-moving event is relatively clear and actually occurs during the domestic session.  That's a rare treat, normally reserved for NFP and FOMC Days.  Then again, today joins those lofty ranks as a sort of 'sneak preview' for the FOMC Announcement two weeks from now.  At least that's what many market participants are hoping.

The 'sneak preview' is the 10am Bernanke Congressional Testimony before the Joint Economic Committee.  We hope, as do others, for more clarity regarding what's ahead in the June 20th FOMC Announcement.  The recent bond market rally has retraced a majority of its gains since breaking previous all-time lows at 1.67 and now stands ready either to reverse course, or continue lower in yield at perhaps a less extreme pace.

There are other events on the calendar today, and as always the European session could set some sort of tone ahead of important domestic data, but we'd reserve the bigger moves for Bernanke.  Rosengren, Lockhart, Kocherlakota and Fisher all provide additional opportunities to divine Fed policy shifts.  Jobless Claims print at 8:30am, but won't move bond markets much unless they deviate tremendously from the 377k consensus. 

There's no safe way to get too far ahead of today's movement.  Here are some technical levels in MBS and 10yr Treasuries and the corresponding feelings they'd probably create for us.

10yr yields  (positive):

1.67%  - intermediate term neutrality.  long term, we'd be happy with support here, assuming that we want yields to go lower.

1.60-1.62 - small victory.  strong overnight session and this could be toast already

1.55 - now we're talkin'

1.51 - now we're talkin' significantly more clearly and louder

1.44 - now we're sorta scared

10yr yields (negative)

1.7075 - crossing the gateway back into the the range from mid-May.  "I got a bad feeling about this."  That's a line you might hear in a movie right before something good or bad happens.

1.745 - that "bad feeling" just got real unless we bounce lower now

1.79 - "bad feeling" essentially confirmed if we break this in high volume--the gateway back into the previous long-term sideways range.  Wait... 1.80-2.10 wasn't that bad. 

MBS (much simpler than TSYs)

105-02 in Fannie 3.5's - "yay"

104-24-104-15 - "meh..."

104-04 - "boo!"