Lots to consider...

It doesn't appear rates will get worse by the end of the day, but it is also not a strong probability of improvements (though some lenders have repriced for the better, most won't.  Feel free to float up until your lock cutoff and then consider your options as discussed below).

We're light on news for the next 3 days: markets closed Friday, no news Monday, and limited news on Tuesday.  So volatility will come largely from "headline risk," that is to say, not scheduled economic reports, but rather financial news headlines.

There's no doubt that this afternoon is a safe time and a good time to lock.  But will it be the best time for closings taking place in the near term?  Great question.  Next week we have several important reports on the consumer, we have the GDP, Durable Goods report, and several other moderately important reports.

You'll have to go with your gut on this one.  MBS specific headline risk seems to be favorable recently with the OFHEO announcement, the Bear Bail-Out, and the FHLB proposal, all of which ease liquidity concerns.  So if we continue to operate in that relative vacuum (where MBS respond to broad economic data and stocks as opposed to specific MBS related news), then the economic reports next week should have their normally expected impacts.  For instance, if any given report indicates economic weakness, rates will generally improve.

Watch out for the durable goods report as the somewhat interconnected Philly Fed survey surprised us today with better than expected numbers.  As far as consumer-related data, my money is on continued weakness.  I believe the weak will be economically weak in general, but that is tempered by the suggestion that analysts are slowly becoming more realistic (and pessimistic) and thus the consensus expectations can be set so aggressively that we won't see weaker than expected data on certain reports despite it's weak reading relative to historical data.

With the 5.5% coupon still "hanging out" in that 101-00 to 101-10 range, there is certainly room for it to start what I feel is an almost inevitable trend upward (assuming MBS-Specific headline risk stays minimal).  The spreads to the 10 year UST are still very very high, which means there is room for the MBS to "close the gap" as traders become more comfortable with the actual yield estimates.  It's a tough call, but I remain a bear.  I don't think this market is going to get the wind in its sails any time soon.  Combine that with a reasonably large uptick in the DJIA, and there is room for the DJIA to fall a bit next week into a range it is more comfortable with (closer to 12 even) and MBS to improve (again, only the vacuum devoid of negative MBS specific headlines).

So I am going to float yet again, for better or worse.  I think it is a calculated risk worth taking despite other analysts reliance upon technical ceilings.  My read on the technicals is that we have continued on a steady trend of "bouncing ball" moving upwards along the 50 day moving average price curve.  The next bounce should take us to 102-00 this week if the trend holds, but they are not always reliable.  Still, the "trend is your friend" when it comes to recessionary slides.  We are in one certainly and the trends historically follow a similar pattern that indicates the potential for us to break through our ceiling.  Please apply your own lens to my opinions.  Take a look at the scheduled economic reports for next week and draw your own conclusions based on your bullishness or bearishness.  Strong data - lock today.  If you think the data will be weak, float with me.  If you are unsure and you can feed your family based on current YSP's, you'll never regret a prudent lock as much as you will regret a dead loan because you missed the rate window.  In that case, even if rates do improve next week, locking will be safest for you.

I will attempt to work up a graph of this "bouncing ball" I mentioned and post it over the weekend.  Have a safe and chocolate-coma-inducing Easter to those of you who observe the holiday.