By mid-November, bonds were rallying after hitting their weakest levels since the start of the pandemic.  Due to the timing (i.e. heading into a holiday week that that's notorious for hitting the pause button on prevailing momentum) we couldn't be sure if the friendly bounce was actually friendly or just a byproduct of position-squaring ahead of Thanksgiving week.  Traders' hands were largely tied for the only remaining full trading day of November (Monday the 30th), but were free to move about the cabin by last Tuesday. 

Whether it was due to the stimulus headlines on Tuesday morning, or simply a flood of "new month" trading positions, it was clear that yields were moving quickly back up toward their highest levels in months.  At that point, they had a choice between one of two technical ceilings.  They could opt to bounce near previous highs (roughly .96-.975) or they could proceed to the top of the prevailing trend channel (upper yellow line in the chart), thus hitting something near 1.05%.  Thankfully they chose the lesser of those two evils and now seek to confirm the lower end of the near term range. 

Meanwhile, MBS still can't be bothered to pay much attention to the broader bond market.  This resulted in ample outperformance while Treasury yields were rising, but the shoe is on the other foot so far this week.  Treasuries have rallied moderately both days while MBS are sideways to weaker.  Combined with yield erosion due to low rates and early payoffs, the result is the biggest little spike in MBS underperformance in months.  That may sound scary, but outperformance had basically gone plaid as of last week.  This brings it back to mere ludicrous speed.