When your career is directly impacted by bond market trends, and when you watch those trends on a nitty gritty, intraday level, one of the most insidious pitfalls is to get too wrapped up in every little move.  Traders and strategists are taking a broader view than most loan officers and other bond market stakeholders in the mortgage industry.  As mortgage people susceptible to intraday reprices, our noses are pressed up against the trade screen while the generalists are leaning back in their chairs looking at multiple monitors.

Does that makes sense?  I can rephrase.  

If you're freaked out, flustered, upset, perturbed, worried, etc. about a few bps of weakness amidst a broader trend of strength, knock it off! 

Trends won't happen in straight lines... EVER!  Every trader knows this and you need to know it too.  You need to be prepared for the pull-backs that will inevitably happen during downtrends in rates.  

If you're wondering what's up with the soapbox speech this morning, it's quite simply due to the fact that today begins with just such a pull-back.  In fact, it's a fantastic example of why you're way out of line to be at all concerned about the weakness (don't worry, I'm not talking to you if you're not concerned).

A chart tells 100% of the story in this case.  The following chart shows the recent downtrend in rates.  All of today's weakness is already represented in the rightmost candlesticks.  All of the empty space in the bigger white oval is the amount of ground bonds would have to lose before anyone had any meaningful reason to be concerned about the trend being in jeopardy. 

Bottom line: it won't happen in a straight line.  Don't fall into the trap of expecting a perpetual rally every day simply because the broader trend has been positive for more than a month and because yesterday saw new long-term lows.  Am I saying that we're going to continue lower?  No.  No one could know that.  It's certainly a possibility.  I'm saying this morning's weakness doesn't mean we're going to continue higher (although that's always a possibility as well).  All we know is that the broader trend remains very much intact until it's no longer intact, and 10yr yields would need to rise above 2.30 today for us to even open that conversation.