A.G. EDWARDS DOWNGRADES A HOST OF MLPS...

OPPORTUNITIES?

OIL AND GAS CONTINUE RISING!

IS AN MLP CORRECTION COMING?

This Tuesday begins with A G Edwards busy with the cutting knife this morning as it downgrades a host of MLPS. Atlas Pipeline Partners (APL) Crosstex Energy LP (XTEX) Markwest Energy LP (MWE) and Inergy Holdings (NRGP) all cut to hold from buy. I don't know if the cuts were made strictly based on price or if there were more fundamental reasons for the cuts. All of them are up...some are up quite a bit like Markwest which has moved from 40 to 60 in the last few months. I will post any info as i find out details. Inergy Holdings was a recent buy of mine based on the chart looking like it was ready for another upleg. We'll see what today brings but let me point out that recently downgrades have done very little to keep prices down so after a price drop at the open don't be surprised if prices rally back by days end.


With the bitter cold covering the midwest and northeast energy is rallying this morning as crude is up 1 dollar and nears 60. Natural gas is approaching 8 dollars again this morning. So there will be wind at our backs at the open. Weather pattern will relax from the extreme cold late this week but temperatures will be still below normal much of the time in the next 2 weeks which should keep a bid under prices.


I am putting the question out there about a correction for MLPS not because i think one is beginning today or tomorrow (although it could) but just to put a few ideas out there. I watch the group trade all day long looking for trading opportunities. I have noticed that at least on a short term basis what has been happening is that individual MLPS are having some rather violent (relatively speaking) intra-day corrections of 1 to 2 points and occasionally more. The moves come fast and furious and unless you are watching tick by tick they may go un-noticed until you perhaps look at a chart.




Notice the trading action over the last few days has been all over the place particurally Friday and yesteday. Now some of this might be attributed to pre and post distribution action and perhaps that could be used to justify alot of these intra-day corrections. But whatever the reason the stocks are behaving like they should in a bull move..higher prices met every so often with a fast and furious correction. Now the group at some point is going to have to go through a correction of more than a few days. Trying to figure out when is another matter entirely

No sign of a top on the daily chart and no sign of a top on the weekly chart either.

I think the moral of this yarn is by the time we realize we're in a correction we will probably be about half way through it. In the meantime 300 on the MLP index is within striking distance.

No other corporate developements this morning as a few more MLPS go ex-distribution today including Markwest Energy (MWE) which is ex-dis by a dollar. So between that and the rating cut it could be down 2 or 3 dollars at the open.