Not that economic data was our enemy on Thursday (more to do with follow through from Wednesday), but today we have no data, and a day behind us where ground was ultimately held despite the weaker start and despite the break of some hefty resistance in Treasuries.  The question is remarkably relevant: was that the last explosion?  Or is there more pain ahead? 

The best I can offer here is that each day holding above previous support would be positive, but we didn't hold above the previous session's support yesterday, so UNTIL we have our FIRST post-sell-off example, we'd remain defensive.  Unfortunately,  it is possible we could lose more ground before what should at least be some consolidation. 

Compared to 2010, we'd be about 80% through with the move.  If we were to extend the current sell-off by roughly the amount needed to match 2010, it puts Fannie 3.5s right around par (100-00), which would "only" be just over a point lower than yesterday's lows, and incidentally, the next support line on this wacky contraption known as a Gann fan:

This cutesy technical stuff is all well and good, but the fact is that we're watching the story unfold and no chart is ready to predict how it will happen yet.  Once we stop the free-fall, we can take a look at what might come next, but until then, we can only watch and wait.  Is there hope the waiting ends today?  Yes,  but there's still a risk it will not.