For those of us whose lives are intertwined by mortgage markets, these are dark times.  The 3-day sell-off just seen in MBS (or Treasuries for that matter) is as bad as I have seen, and that's saying something considering I wrote the original coverage on 'Black Wednesday.'  Whereas that movement was more of a growing pain with respect to the 4+ years of the Fed in MBS markets, the current move is more akin to death throes.  That's not to say that the benefits of Fed MBS purchases ended this week, but it is safe to say that this week was, by far and away, the most significant confrontation those benefits have had with their mortality.  Consider the 'beginning of the end' of a relationship as epic and storied as that of the Fed and MBS is a grave matter indeed.  That gravity is grotesquely evident in the following chart of weekly candles:

When I put the Gann Fan chart on the Day Ahead, I didn't imagine it would stand too much of a chance of being relevant today, but included it just to lay out the boundaries of what I felt like the worse case scenario might be.  Far from irrelevant in retrospect:

There was no data or news to blame for today's move.  This is pure pain trade gone bad.  This is a snowball compounded by uncertainty.  This is the break-up letter we were afraid to get in early 2013 that surprisingly showed up on our doorstep in May.  This is the biggest falling knife in 10 years for bond markets and no one wants to catch it.  It's still falling.  For those of us deeply focused on mortgage markets for a living, it feels like we're falling, still waiting to hit bottom, hoping it's bouncy.  Even if it's not, hopefully someone has a parachute.  And even though the Fed sent the break-up letter, hopefully they're still willing to talk it over.  If not, the effects on the mortgage market may be a bit more 'psycho ex' than pundits seem to be expecting.  There's nothing left to say.  Try to detach from this ugliness and take care of yourself this weekend.  We're down, but we're not out.