MBS Prices Falling in Choppy Trading Environment. Reprices Possible

• FN 4.5's up 3 ticks to 101-23.  They were as high as 102-02 earlier today
• 10yr yields dipped below 3.4 today, but have also stepped back.  Currently .6 bps higher at 3.461
• Dow is down 57.7 at 10563. S&P is down about 6 at 1128.
• Homebuilder Expectations Continue To Improve (full story...)

Things are starting to look "parabolic" for MBS prices (lower in AM, higher at noon, back to lows now), but considering that a majority of the day's volume was in the morning hours, current losses may be skewed by low volume and liquidity.  Still, both MBS and treasuries are at or near their worse levels of the day while stocks pull back from the lows with a little late day rally--all the ingredients for reprices for the worse--albeit only in small amounts.

Longer term considerations about today's relatively small movements will follow later in the day.  For now, be aware of potential reprices for the worse, but with the understanding that nothing very meaningful has transpired in today's trade.  In other words, yeah, you might lose a bit by floating, but that's just the way the ball bounced today if it happens.  No indication of what the rest of the week will hold, for better or worse.