MBS MID-MORNING: Eerily Pertinent Technicals and "What A Coincidence!"

Observe the following chart, our current 2 day on the 5.0:

Aside from just being pretty to look at, there are a few points of interest.  What a coincidence it is that as we rallied hard this AM that we bounced hard off the 2003 intraday high of 103-02.  Even in tumultuous markets, techs still have their place. Our ceiling "zone," is a combination of retracement levels and 2003 closing price highs.  The support zone is based on some internal trendlines as well as today's 62% retracement level.

The question as to whether or not we are rangebound simply references the range in between those two zones where we have been "stuck" since falling into the range earlier this AM.  We've tested the top of the support zone several times in recent minutes after testing the bottom of the ceiling zone over the previous half hour.  All these failed retests continue to add strength to the rangebound trend.  This does not mean that the range will hold!  By having a "stong trend" technical analysis never asserts the trend will continue, but rather informs us of the significance of breaking the trend.  In other words, if the trend breaks on the low side, things may go lower, and vice versa for high.  But don't expect a definitive break above 2003 highs today.