Day's like today can't hep but give the average market watcher a bit of a sinking feeling.  Was that it?  Was yesterday's visit to the lowest yields since 20XX a sign of the final throes of market capitulation?  Did that wash out all the trades that were piling on to the insane momentum and are we now destined to move resolutely back in the other direction?

At the risk of bearing bad news, that can't ever be ruled out.  I would personally have an easier time ruling it out if stocks and oil prices didn't simultaneously experience a double bottom  in line with late January lows.  As long as it looks like they're contemplating holding their ground there, bond markets will remain at risk for further correction.

The potential saving grace is that much of today's bounce could simply have been driven by stock and oil traders covering short positions.  That would mean they are buying (thus pushing prices up) in order to close out their bearish bets ahead of the long weekend.  We will talk more about some of the technical mileposts we can use to gauge which way momentum is leaning on Tuesday, but certainly, that will include a big line in the sand at 1.84% in 10yr yields.   

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
FNMA 3.5
104-23 : -0-11
10 YR
1.7360 : +0.0920
Pricing as of 2/12/16 4:09PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
1:30PM  :  ALERT ISSUED: Negative Reprices Increasingly Likely
10:59AM  :  ALERT ISSUED: Negative Reprice Risk Increasing For Some Lenders
8:36AM  :  First Move is Weaker After Decent Retail Sales Data

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "Lenders aren't pricing much off the 3.5. We're off 3/8ths of a point in 3.0s on top of whatever didn't make it into afternoon reprices yesterday. Double whammy"
Peter Lassig II  :  "MG: It seems as though rates have worsened much more than is reflected in the Fannie 3.5. Is that because lenders are being even more cautious about the coming days?"
Matthew Graham  :  "that guy sounds wicked smaht. I think I'm going to get a subscription."
Nathan Miller  :  "show her the recap from yesterday " “any time bonds move as much as they have, risks increase that the consolidative pull-backs will be bigger and longer. As such, if we lose ground tomorrow, it could look fairly serious. " and tell her to get a subscription"
Matthew Graham  :  "why bring thought and emotion into it. Just show the LO the chart with a little arrow pointing to the bottom of the MBS price canyon saying "you are here.""
Ted Rood  :  "Guessing she's not an MBS Live client?"
Christopher Stevens  :  "Loan Officer: What the hell happened? I forgot to lock my guy yesterday and today the rate went from 3.6250% to 3.750% Me: Lets take a minute and think about how funny that sentence sounds remembering we were at 4.375 as we started the year. From her reaction I think I found it funnier than she did."
Justin Brilman  :  "Steve we hit 1.53 intraday yesterday so OO not far off. I believe today is simply some consolidation and profit taking before another move lower. What has changed since Wednesday to support a run higher?"