4. Despite all the hoopla about banks benefiting from rising interbank lending rates, the banking index ETF is very bearish and has violated prior lows. Some banks may be exposed to low rated corporate bonds which are potentially subject to default going forward. Furthermore, with deterioration in GDP to under 1% last quarter and sequential negative PMI readings, coming recession is quite possible.

5. The HYG---high yield bonds---continue their 'zig zag' downward--and stocks usually follow their lead. Money is rotating into government bonds in spite of historically low yields for perceived capital preservation and a small return. Just keep in mind when rates DO climb at some future time, one loses principal unless holding to maturity. And, most defensive utilities and staples ultimately fall in a bear market. Cash is the only guarantee of capital preservation under such conditions.