MBS are currently responding favorably to a supportive event in benchmark 10's. The fact that 10yr yields (so far) appear to be holding the line just under 2.10 this morning is a positive sign in terms of overall volatility. Fannie 3.5's had been trading a narrowing range until 10yr yields broke positively out of their own narrowing range. After that, MBS did the same and continue trading over the 101-26 technical (also the scene of the breakout). The longer this phenomenon plays out, the more likely it becomes that we'd see the characteristically early-to-act lenders repricing for the better, even if only by small token amounts. More time and better gains would be needed before positive reprices would be seen by a majority of lenders.

Here's a shot at how this began to play out on the MBS Live Dashboard:

Since that video was snapped, the rally has progressed somewhat.  In terms of benchmark 10's, the prevailing range was broken this morning and yields are now trying to get back under the 2.07 level.  Here's what the longer term chart looks like:

Despite the huge rally in stocks overnight and earlier this morning, the levels at which S&P's seem to be having second thoughts are fairly interesting.  Not only are they hitting the downtrend line from the epic triangle we'd been tracking for a while, but they're also in line with the levels at which the uptrend line was broken.  This is fairly common when competing trends are resolved.  One one hand, the bounce against the older downtrend line is just a reiteration that that was the victorious trend.  On the other hand, the spot where the triangle breakout occurred suggests it could be used as a horizontal level to assess a sideways trend.  The fact that both of those lines intersect right where S&P's are running out of steam today suggests stocks that either a sideways or downtrend is STILL intact, until trading levels prove otherwise.

Last but not least, our beloved MBS...  Simply going about their business, capitalizing on any and all hints of stability from benchmarks, continuing to trade a mostly flat, but perhaps slightly conical range, consolidating around the 101-26 level.  Looks like the concrete ceiling/floor have become the concrete playground.