In both long and short term contexts, MBS's march to the top has been uncanny in terms of its stability and determination.  Lately we've noted with increasing frequency, the fact that MBS have been less prone to price volatility than their Treasury counterparts--losing less on the down days in exchange for tamer rallies on the "up" days.  This phenomenon isn't exactly new science, but examples have been increasingly clear.  The video snapshot below from MBS Live shows this dynamic in the short term.  Treasuries move was more pronounced relative to their recent trading range while MBS never rose beyond their 930am Highs.

Looking now at MBS over a longer time frame, we see that the gains have an almost premeditated regularity.  MBS look like they know where they must go, but have asserted that they'll go at their own pace in their own time. The implied diagonal, ascending line that lies under most of the price action is thus a FANTASTIC early warning that "something might be changing" about this incredibly regular uptrend.  In another way of looking at things, Early August through September are akin to MBS's younger, more heady days when they could climb the tower as quickly as anyone ("the hare"), but now in their old age, move at a more restrained, but steady pace ("the tortoise").

Shifting gears now to specifically examine today's rally...  It was all about the France downgrade.  Well...  "all about" is a dangerous thing to say or assume, but certainly, it looked to be the key driver of the risk-off flight-to-quality that propped up the Treasury rally, and to a lesser extent, that of MBS.  When things started getting vertical, there were various opinions as to what was moving money depending on where you looked.  There could be all kinds of logic in other explanations of today's moves, but one thing we noticed right away--and it's something that is easy to notice time and time again--is that when certain Euro-events are catalyzing domestic market movements in the broad context of RISK, we tend to see Stocks, The Euro, and Treasuries all moving in concert.  The chart says the rest:

1.84 is a pretty aggressive move for 10yr yields, but they might have some good rationale for stopping there.  The following chart shows the previous downtrend that we'd been tracking periodically on the MBS Commentary, but it shows a new trend channel as well,  with the technical resistance seen at 1.84 today, a more gently sloped bullish trend was further edified--enough so that we'd put it in today's chart and keep an eye on it in the week ahead.  As always, remember that such trendlines don't necessarily predict where things are going, but rather, the confirmed crossing of those trendlines can help us identify when trends are shifting.  The main example of this in the chart below is simply that the sharp counter-rally trend presented by the white line was not only broken, but the bounces on either side add some emphasis to it's technical nature (we mocked this phenomenon up in early October, HERE).