Good Monday Morning.

Hurricane Katrina is the NEWS this morning as it has made lanfall over SE Louisiana as the 3rd strongest landfall ever. Saw a wind gust a New Orleans Lakefront of 80 mph before the anemometer blew away with the eye and the core winds still to come for New Orleans. The impact on the markets this morning has been enormous. Oil Futures over $70...Natural Gas Futures hitting $12 at one point.

In case you are not aware (of course you are!) Louisiana is a big player in US Energy Production and Eurtoa has some interesting stats on the industry and the impact...all thanks by the way to instapundit! And more on the impact from HOG ON ICE. Also econobrowser has an interesting piece on why oil continues to rise. It has to do not with lack of supply but with fear of lack of supply. Usually markets get it right.

Cactus Jack always has inciteful views on the latest goings on in the world of energy.
This week's post makes the case for coal and the energy bottomless pit that is CHINA!

Individual company news is sparse this morning but the big oils are already trading up a dollar or more. Valero is up nearly 3 dollars since it gets a double pump from both oil and nat gas. If i had to make a bet today...it would be that oils will open near their highs and sell off as the day wears on while the nat gas plays will probably hold up better. But the key will be whether crude and natgas futures hold their gains.

One thing to focus from a chart perspective is the XOI INDEX and the XNG INDEX. The charts are above. Usually the stocks tend to be ahead of the curve when calling short term tops. Crude futures made new highs today but the XOI will have to climb over 55 pts to make a new high....menawhile the XNG chart is only a shade short of the new high to equal the move in the nat gas futures. Its a divergence in the oil chart that i think needs to watched. No panic yet but watching. Meanwhile pressure on the 10 year yield this morning down to 4.16, Supportive to MLP'S.

My apologies for not posting this weekend. Katrina kept me very busy. Will be blogging often today.