IF TREADING WATER WERE AN OLYMPIC EVENT? Mortgage Bonds would surely take the gold. It's now been three straight weeks of sideways trading in Mortgage Bonds, leaving home loan rates basically unchanged during this time. Even intra-day movements within the Bond markets have been sluggish and sleepy. Is it just a case of the "Summertime Blues", with many Traders on vacation? Perhaps, but most news releases have been in-line with expectations and geopolitical events have also been relatively calm. Traders seem to lack the conviction to take a firm position one way or another ahead of next week's important Jobs Report, and also the event risks of the upcoming Republican National Convention. But don't get too cozy? this lull in market activity could just be the calm before the storm.

THINKING ABOUT SELLING YOUR HOME? CHANCES ARE GOOD THAT YOU WILL REALIZE A HEALTHY PROFIT? BUT WILL THE UNCLE SAM SWIPE A CHUNK OF THOSE GAINS AWAY? THIS WEEK'S MORTGAGE MARKET VIEW REVEALS A FEW SURPRISING TIPS THAT JUST MIGHT HELP YOU KEEP THE TAXMAN AT BAY.

A full slate of economic data is ahead this week, but Traders will be most keenly focused on Friday's very important Jobs Report. What a difference a season makes... job growth had erupted in the Spring, but then sputtered through the Summer. All the buzz about a heated up economy has turned back to worry, as jobs numbers continue to be dismal of late. Even Mr. Greenspan has labeled the recent weak numbers a "soft patch". If the latest Jobs Report shows a pop back to big growth, Mortgage Bonds will likely suffer and home loan rates will flicker higher. But another clunker of a report may turn the "patch" into a "ditch", and home loan rates should decline. Stay tuned? it will be interesting.

Additionally, the Republican National Convention kicks off in New York City, where security will be high and so will fears of terrorist activity. Traders may move funds out of stocks and into bonds during the convention as a safe haven for investors, known as a "flight to quality". This could help bonds early in the week, and home loan rates could improve just slightly in advance of the Jobs Report.

SELLING YOUR HOUSE FOR A PROFIT? Congratulations! If you've lived in the home for two of the past five years and are married, you get to keep up to $500,000 profit free of federal tax; singles keep up to $250,000 tax free. If your profit level exceeds the limits, you can then deduct costs for improvements and closing fees before paying tax on the excess. This is important to know with home prices appreciating at exceptionally high rates over the past few years.

But what if you haven't lived in the home for two of the past five years. Can you still catch a break?

Believe it or not, you may be eligible for a prorated tax break on the gains, based on the amount of time that you were in the home. You will likely qualify for this tax break if you had to sell due to "unforeseen situations". What qualifies as an unforeseen situation? Things like needing to sell because of a job loss, illness, disasters, multiple births from a single pregnancy, and even divorce.

As always, be sure to consult a tax professional about your individual situation.

A healthy load of economic events is in store for the week, but the biggest attention will be given to Friday's important Jobs Report. This heavyweight indicator of employment levels continues to be headline news, as recent months have showed a slowdown in what looked like a booming job market early in the year.

Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.