May 7th Mortgage Market Wrap-up 3

Mortgage backed securities (MBS) closed down 3 basis points today at 103.97 having remained just 4 basis points below resistance offered by the 200 day moving average.  In the wake of Friday's big double whammy sell-off MBS bonds found themselves looking up at what had been support for several weeks.  After dropping 59 points to end the week, bonds really had little movement on Tuesday.  With a $32 billion Treasury auction taking place and virtually no economic reporting, one would have thought that technical elements would have pushed bonds lower.  They remained somewhat buoyant , however, with the 30 year ending the day 3.5%.