MBS Break Resistance. Reprices Likely!

At 12:10pm on the MBS Dashboard, we said:

The previously mentioned trend channel got a friendly bounce at 11:23am off 101-14 and is currently at 101-19 in FNCL 4.5's. But now, that trend is colliding with the key pivot point at 101-20 and so far has been unsuccessful in extending gains. This coincides with the 3.46's in 10yr notes, which mostly supported yields against further losses yesterday, and is capping them from further gains today. Both these technicals would need to give way if bonds are to advance. That may seem like common sense, but the point is that IF these levels break, it's a positive indication for an ongoing rally as opposed to just a random price movement.

....and then at 12:44pm:

10yr yields have dropped for a 3rd time now to test it's best levels of the day in the mid 3.46's. This has been stalwart in its resistance to further gains, but a break lower isn't out of the question as stocks stagnate sideways. MBS are still in their consolidating trend pattern as well, and a break for 10yr notes will probably coincide with a break to the upside for MBS, drawing the lenders who haven't repriced for the better yet off the sidelines for a bit of afternoon delight (for rate sheets!).

Flash forward to the present moment and yeah.... 

"That Stuff" is pretty much what happened, right down to the afternoon delight.  The following charts, one for 10yr notes, one for MBS, both accompy the earlier comments and show the breakout.