No news this morning yet bond and mortgage back trading pits have been active. Stocks rebounding and 10 year notes at their best levels since last December, coupled with overbought conditions has led to a round of consolidation. Currently, the 10 year note is off 12/32's to yield 3.16%. For a brief moment early this morning (European trading), we touched 3.09%. Mortgage backs have hung in there well but are also off in sympathy with treasuries, down 8/32's on the current coupon. Overall, the market needs a breather, time to relieve the overbought condition and allow technical oscillators to catch up ( get back to neutral on the buy/sell side). This is healthy for the market and doesn't necessarily signal a change in direction. The chart below tells you however that we have violated the uptrend (rally) that has been in place for over 2 months. We will want to pay attention to the futures close (2:00 cst) and the cash close (4:00 cst) to see just where we are on this chart. Any close below current levels will tell you that pricing and yields will need to worsen/go higher to attract investor interest. Nothing huge but just the same you will need to be patient if expecting yesterday' price. Meanwhile, tell your refi people that the market is fueling the bus. It's not ready to leave the station (to higher rates) quite yet but just the same, why wait.