Forced buying is the name of the game as a weak stock market, strength-induced short covering, and duration matching courtesy of the flattening yield curve all combine to lift the bid side of the bond market. 

• MBS 4.5's are up 8 ticks to 101-01
• MBS 4.0's are the next closest to Par, up 8 ticks to 98-03
• the 10yr is up 12 ticks, and yields are down 5 bps to 3.60
• Yesterday's curve flattening holding up to scrutiny today as 2's10's is marginally flatter. 
• Stocks are down over 200 pts in the dow and just over 20 pts in the S&P bringing the latter down to 1117.  Recall the heady resistance the S&P recently faced at 1110.00
• Welcome to the bond market's "counter argument" to the great back up of Dec 2009.

Pivot/Inflection points are in play as the MBS danced about a range UNDER 100-30 yesterday and though today's dance looks the same, it's decidedly on the other side of that 100-30 Fence.  As AQ pointed out however, expect gravity around 101-00.  In the 10yr Tsy, technical resistance at 3.64 is broken and currently testing 3.62 with early signs support as yields have yet to retrace above that level in today's trade. 

Another day in bond bulls favor tomorrow would have rapidly brought the whole enchilada back within 2009's "outer limits" tolerances.  But perhaps a bit too quickly...  We'll touch on the implications of that statement in the close, but for now, all's well that ends well.