LAZY DAYS OF SUMMER

Monday, June 28 –Iraq Handover Day. Now the question is Interest Rates – up, but how fast? U. of Michigan consumer sentiment Index on interest-rate expectations hit a record 85% in May, says Merrill’s David Rosenberg – these levels usually occur at the end of rate hikes and Bond Bear markets. Other contrarian signals are the flat Basic Materials/Gold markets recently, if Inflation is a factor. Greenspan’s “measured” moves cannot afford to disturb the huge mortgage leverage of GSEs like FannieMae and other carry trade institutions that have loaned short and leveraged longer (in Trillions).
Indicators still appear neutral in this low-Volume, apprehensive market, with the VXN (Nasdaq's VIX) at a record low sub-19 and the VIX touching below 14.. Weekly Volume Indicators were slightly impacted by the rebalancing of the 21 Russell Indices last Friday,as the Nasdaq Volume to NYSE Volume ratio spiked up to 137%.