Here is the price action on the 4.0 MBS coupon and thrown in for good measure is the 10 yr tsy, both over the last two days, tick by tick.

As you can see, MBS are tightening spreads a bit for reasons that have been and will be discussed in other blog posts.

IF the market were to close right now, here is how the day over day chart would look:

Although we started lower this AM, we have risen above yesterday's closing levels.  This is known as a "bullish engulfing pattern" in the candle lexicon and would confirmation to yesterday's "spinning top" which, as we discussed, was a POTENTIAL indicator of a reversal of the recent downtrend.  Whatever the case, we would still be operating solidly in the middle of the trend channel.  PLEASE see the below blog post by AQ for this post's concomitant analysis.