After opening weaker and continuing to sell in the morning hours, MBS and Treasuries have moved into a bit of a sideways stance ahead of the first of the afternoon's two important events.  

Granted, the fact that there are TWO important events ahead means that the first one will probably experience a more muted response.  The fact that the second event is the FOMC Announcement at 2:15pm makes this doubly true, because even as important events go, that's a heavy hitter.  

The upcoming 1pm 10yr Treasury Note Auction is no slouch though.  A strong result could help us hold within the boundaries of longer term ranges ahead of the FOMC announcement.  As it is, we're already pushing boundaries.

But Fannie 3.5 MBS above look a bit less scary than 10yr yields.  As we've said before, it's 10yr yields that are more indicative of broader shifts in bond market sentiment, and so far today, they would have us believe that some sort of shift is at hand. 

The chart above just contains arbitrary trendlines over a fairly short time frame (although the red lnie is the 2012 regression line, just showing the average direction of the market).  The charts below are presented in triptych, moving from a medium term perspective to a very long term view.  The first two show the competition between the longer standing downtrend (red) and the counterattacking uptrend (teal), all of which is set against Fibonacci retracements between the post 8/11 highs and lows as well as the 100 day moving average.  The third chart in the triptych is just there for perspective.