After the Fed completes scheduled buying in 8-10yr maturities at 11am, potential market movers on the calendar are in short supply.  Even then, the biggest market mover, and the one that has provided the default bullish slant to all things bond-related today, has European headlines.  In particular, Greece is the catalyst today, as the country has rejected the EU's placement of a budget overseer in Athens as a condition of the bailout.  The fallout from that news was seen across the Euro-zone in the overnight session and into this morning as peripheral debt markets weakened (poor showing for Italian auction, Portuguese yields hit highs).

For being at all-time highs, MBS have been trading in a range so narrow that it borders on silliness.  This is partly a factor of organic resistance and partly a factor of broader bond markets simply trading narrow ranges this morning.  Both of these phenomena can be seen in the video clip below from MBS Live:

Fannie 3.5's since August 2011:

Volumes have been more even-keeled this morning, lending a sort of anticlimactic vibe to the rally.  It's almost as if markets have been well-conditioned for orderly flights-to-safety on certain types of Euro-zone headlines, at least as far as bond markets are concerned. 

10yr Treasuries logically encountering some resistance at current levels based on a simple horizontal range below--one that has generally persisted for 3 months now.

Stocks, on the other hand, have more at stake when it comes to flights-to-safety, being at their highest levels since mid-2011 last week, and also unable to break back above a trendline from the "triangle" that occurred in October/November (the upwardly sloped green line in the chart below).

The longer term consideration, as far as trends are concerned, is the downtrend that connects 2007, 2011, and 2012 highs.  As you can see in the chart above, stocks bounced there on Thursday, and today are experiencing their worst day of losses of the year.  This isn't to say that stocks are necessarily "doomed," but if you've been wondering just how long the recent stock rally would continue in calm, determined fashion, it's now running into some compelling resistance.  As an eternal reminder on technical analysis of this sort, that doesn't mean they're more likely to bounce than break, but rather, if stocks do break above the line, that they'd be testing to confirm the end of the big, long-term trend seen below.