Low trading volume was typical for a summer Monday and with a decline in Stocks, MBS didn't have a big upside move as prices have rallied big and may be topping out.The rally in Bonds is getting long in the tooth. I grow ever so cautious as the benchmark 3.5% Fannie Mae 30-year has gained nearly 200bp since the July 13 low. And with the Jobs Report coming on Friday, risk is high at this point. Prices are facing tough resistance at the 200-Day Moving Average and could not muster any gains today in the face of weak stocks. Consider locking for first time in a month.Mortgage Bonds rose 13 of the last 16 days breaking through several key technical resistance levels. Tame inflation data supported Mortgage Bonds along with sizable buying by the Fed this morning. The 3.5% Fannie 30-yr coupon closed near unchanged at 103.88. Stocks ended way off the session lows - the Dow lost 91.66 points to 17,598.20, the Nasdaq fell by 12.89 points to 5,115.38, while the S&P 500 was down 5.80 points to 2,098.04. WTI oil was last seen at $45.40/barrel down $1.72. 10-yr T Note yield 2.15%. No economic data tomorrow.