The Merrill Lynch MOVE Index, according to Bloomberg, is a “yield curve weighted index of the normalized implied volatility on 1-month Treasury options.” In basic terms, the MOVE Index shows what the option market is pricing in (or implying) regarding a change in interest rates across the yield curve; it takes a weighted average of that implied market move, annualizes them, and then normalizes the figures (puts them in the context of current interest rates). On 12/3 the index hit the lowest figure on record, 51bps, since the index began pricing in 1988. At its most basic level, that means the MOVE Index is implying a 51bps change for interest rates across the curve over the next year. The index does not imply direction, only that a change of 51bps over the next year is prices in to the market.
According to regression analysis, the MOVE Index has an 84% correlation to MBS spreads. In the fall of 2008 when MBS spreads peaked, the peak in the MOVE Index occurred at virtually the same time.