<MG rolls out of bed and looks around.  Seems to be quite a bit of activity for 4:45AM Pacific Time...  Looks like a lot of blog readers with half empty drinks conversing in "after hours" format.  Strewn about the floor are hundreds of fax confirmation pages on what look like lock requests.  "Trader's Paradise" is playing in the background.  MG shakes of his angst over losing the royalty rights on that little ditty and speaks>

Good Morning All!  What's everyone doing over here so early in the day?  What? It's 3:30?  Wow! 

Indeed AQ has been heroic this AM...  Managing the content as usual on MND and covering all three morning blogs as I continue to throw elbows and execute body slam after body slam in an attempt to get the under-the-weather 3 year old away from "Daddy's Computer!  Daddy's Computer!  Daddy's Computer!"  Well, that's what he calls it at least...  Anyway, even though I haven't had the morning off from either job, I might as well have considering AQ's AM call:

".there is a clear layer of resistance at 3.76%.  Looking at a wider range, I see a range between 3.70% and 3.84% developing. I find it unlikely that rates move too far in either direction as the market will remain defensive ahead of NFP on Friday. This means profits will be taken if rates start to make progress. It also implies we should see "buying on the dips" in the event prices cheapen up. The overall result of this strategy will be a narrowing range/sideways price action"

That's turned out pretty well for him... I'm jealous. 

Sure, the absolute lows in yield were at 3.75 in 10's, and had he and I been on the phone as much as normal this AM, I'm sure I would have gone with 3.75, but 3.76 actually has many more "touches" by way of showing RESISTANCE and MODALITY.  (remember past discussions of "modal lows?").  Either way, s'good!

Makes me think that as yields rise again at the moment, that the magic voodoo pacts AQ made this AM will keep 3.84ish informative as far as support against further losses in bonds.  Hey, that would probably be a good bet for all of us!  I'd add that although there has been a ton of volatility in mortgages so far today, we're already in that very witching time of the afternoon when the Fed starts feeling primal urges to buy buy buy.  Having not yet consulted the MBS Ninja or other "folks in the know," its fairly safe to say that's exactly what we're seeing as MBS hold near the middle or even upper middle portion of their trading range as treasuries approach the worst portions of theirs.

One thing is true in both markets, duration shedding, yield curve steepening, "up in coupon," etc...  Call it what you will, the bottom line is that rate sheet influential parts of the stack are down 10, 6, 5 ticks versus the premium 6.0's down only a tick (and the 2yr note UP a "mighty" eighth, good enough to drop the yield just over a bp).  282.7 bps in the 2s v 10s curve is Matterhorn-like territory again, not universally thought to "last forever."   But as I hope to write up in more detail this evening or tomorrow, in the current climate, HIGHER yields are the safer direction in which to lead off from the previous ranges that define the proverbial "base." 

<"wow... MG is a bit rambly in the AM!  Someone get that guy some coffee.>

Sorry, I'll get to the point.  If you were going to get a reprice for the worse, you already did.  If not, it's not looking like enough time or weakness left to see one today.