After hitting an intraday high of 101-16 this morning, an unfriendly trend channel developed and the FN 4.5 fell to an intraday low print of 101-04. Since hitting that intraday low...the FN 4.5 has moved to the middle of the recent RANGE. Currently the FN 4.5 is trading -0-03 at 101-08 yielding 4.3469%. The FN 4.0 is -0-02 at 99-01 yielding 4.1092%. The secondary market current coupon is 4.2161%.

The recent bond market rally has led the yield curve and benchmark TSYs into numerous resistance levels that, if broken, might imply a general shift in the sentiment of the market place. Although the convergence of month end and quarter end supportive events have likely led us to consider a potential range break and new trend trading environment, we cant ignore the yield levels fixed income investors have accepted all week. Or can we?

Tuesday 9/29 at a Glance * MBS down 1 tick on the day to 101-11, continuing to close at multi-month highs * Real Money (insurance funds, etc..) took profits at times, nothing hedge funds and servicer buying couldn't handle. * New production (MBS being sold by originators aka, the loans you've all been locking) moderately healthy over 2 billion. See it come. See it go... right onto the Fed's balance sheet (Fed buying still taking down almost all supply offerings). What else is new? * Tsys similar as 10yr yield backed up modestly moving from 3.27+ last night to 3.291 currently * Fed buys $3.55b 2012 Treasuries in open market operations * Stocks mostly flat according to S&P, down a point and a half to 1060.61. Dow a bit more bearish down 47.2 on tech and oil * BNP Paripas, largest Franc Bank to raise capital to get out from under the TARP. Stock up overnight. Lost about half the gain in heavy, late volume. * DATA: Case Shiller HPI +1.6% m/m (prev: +1.4%, consensus: +0.5%) -13.3% y/y; 18/20 metro areas improved in July. Yields moved higher. * DATA: Consumer Confidence 53.1 (prev: 54.5, consensus 57.0). present situation index lowest since March (stock market lows?), Consumer Expectations flat * Fed"s Fisher: Fed exit needs to start as soon as economy shows convincing traction; Fed will act in timely way to reverse accommodative policy; Reversal could be equal in speed and intensity to 2007-08 easing; Housing sector may have reached bottom, but "still on life support"; Job market getting "less worse", but still likely to hit 10% on unemployment * Fed"s Cumming: Substantial slack putting downward pressure on prices; Recovery likely to be sluggish; US consumption likely will continue to be weak; May not be out of the woods yet in housing * Pimco Gross: Buying treasuries to protect against deflation (with a D!), but what does he know...

We're about overdue for some triangles wouldn't you say? Today's post morning correction certainly provides for that. Triangles mean different things to different people. Some technical analysts consider a topside breakout to be support for the bullish trendline itself (vice versa for downside breakout), whereas others simply see the occurrence of one breakout before another to speak only generally to the forthcoming trading. The fact is that triangles occur so frequently in intraday trading that they'll never be as accurate of a predictive tool as I'm sure we'd all like them to be. For our purposes, it's at least a much quicker way of saying "convergence of competing trends."

Good Morning. The rates market is giving back a portion of yesterday's gains. Stock futures are higher. The 10yr TSY note yield is trading near 3.33%. The FN 4.5 is -0-05 at 101-07. It is expected to be another light volume day as quarter end is looming...not as quiet as yesterday though.

Heading into the 5pm "MY SCREENS ARE ALREADY TURNED OFF" marking period, the FN 4.5 is at the highs of the day...+0-07 at 101-11 yielding 4.33%. Spotty reprices for the better were reported, better rate sheet rebates were not widespread.

Besides another round of record TSY issuances last week (which is what many are trading), weakness in stocks, some bond bullish econ data, and the approaching month end/quarter end were supportive of an added bid in bond markets last week. "Rate sheet influential" MBS/TSY (and swap) spreads tightened, the secondary market current coupon was slightly lower at 4.283%, and mortgage rates held near fourth month lows. All in all it was a good week for mortgage professionals looking to lock up any last minute month end closings.