The Reuters/University of Michigan preliminary consumer confidence index for January rose to 61.9 from the final December reading of 60.1. Consensus was for a 59.0 reading.  Yes, this better than expected, but still historically awful.  Because this can be both "good and bad," markets have not reacted much.

MBS has entered a someone sideways pattern around the 101-25 price level in 4.5's.  This is historically significant from a technical analysis perspective.  Reason: this is a price level that we broke through on Jan 6th and we have not closed below since.  Moreover, it was a reasonably strong ceiling in the last part of December.  The fact that it acted as a ceiling on the way up, had been tested for a somewhate extended period of time, and then convincingly broken suggests that it be a new floor against downticks.  With treasuries selling profoundly, yet MBS holding this level, it strengthens the suggestion to treat this as a floor.  But as we like to point out, the existence of a floor doesn't mean it won't be broken, but rather that when it is broken, it's significant.  Let's hope we can hold this today.  Even if we don't, it may not be the end of the world as several lenders rate sheets this AM have come out unchanged or slightly improved from yesterday.  This suggests that, at least among some, the effects of the roll are having a positive effect.  This may vary lender to lender, but in general, it should continue to improve.

Here's what the charts look like to show you the longer term creation of the cieling/floor, and then a 2 day chart to show that we have been dancing around it, but currently above.