With the trading activity seen in the wake of last Wednesday's high-volume/high-movement day, it's clear that bond markets have been in a holding pattern ever since.  As can be seen in today's chart, and as we discussed in detail on MBS Live yesterday, every subsequent trading day has fallen "inside" Wednesday's range (thus the term "inside days").  That range can be seen in the white lines.

The teal lines introduce another concept: consolidation.  In other words, not only have yields held inside a sideways range, they've also generally been offering lower highs and higher lows.  This results in a narrowing range that implies a breakout by month-end.  

If we see a fairly strong break of the teal lines, it increases the odds of the corresponding white line being tested.  In other words, while we can't know which way the range will break until we see it happen, a break LOWER out of the consolidation trend (teal lines) would be a vote in favor of breaking the low end of the range (white lines) and vice versa.

Today offers little by way of scheduled data or events.  True, there are economic reports on the calendar, but none of them are significant market movers at the moment (this hasn't been true throughout economic history as there are plenty of times where Jobless Claims and home price data mattered).