MBS LUNCH: Bonds Soaring As 10yr Flirts With 2009 Ranges

Even by the time of our last commentary, it was no mystery that we got our bond-friendly eventuality today after the jobs report.  That's nice, of course, but somewhere between 3.55 and 3.57, chart watchers will notice that yields held under these levels for the majority of the 2nd half of 2009.  It's probable that the short term chart below is picking some of that up in where it decided to offer resistance today.  The question is: will Monday confirm this test?

And of course we wouldn't talk about such important long term levels without refreshing our collective memory on their validity:

In deciding how likely any sort of continuation of this bond rally might be, the stock market continues to suggest itself as a good indicator of bond movements.  Sure, this can change from day to day, but in general, we've seen more charts like the one below in recent days and weeks than we normally see.

Oh, and did we mention that 4.5's are up 6 ticks on the day at 101-16?  Because they are!

No sense in overcomplicating things at this point.  We'll give you a heads up if a correction saps some of these gains.  But just as our eyes and ears are peeled for any sign of profit taking, maybe you should consider doing some of your own?