NEW ALL TIME HIGHS

BUT ARE WE GETTING STRETCHED?

ENERGY TRANSFER PARTNERS EARNINGS

NUSTAR IS THE GASOLINE PLAY

The first earnings report of the quarter is out in the MLP group and its from Energy Transfer Partners which reports higher profits thanks to a drop in costs while revenue was down a bit. Most of the time the market has this stuff figured out and its priced into the stock. Conference call to follow later this morning so we'll see if they say anything about the rest of 2007. Judging by the action of MLPS we are pricing in some good earnings and most importanly some healthy distribution increases. The rally has been pretty sharp so there is no room for error here.


Meanwhile we're up 5 days in a row here...7 points on the MLP index to 321.80 or a little over 2%.

I am beginning to get a little concerned here that we have not had a pullback of any real consequence since late December 2006. At some point we have to at least pull back to the moving average support area but i don't know what the catylist will be. More and more attention is coming to this group. We have a lot of new owners here and yields have been driven down to where the spread between MLPS and the 10 year has narrowed to less than 2%...to the ones growing their distributions the fastest the spread is less than 1%. Now maybe with 10 year rates in a tight range and high demand for energy the group is squarly in the pocket of a long term bull move and that we have much higher to go here. Maybe the correction comes as the stocks go ex-distribution later this month and in early May. I would favor the view that the correction would be a sideways move for awhile. Meanwhile until it comes we'll just keep making money.

Nustar (NS) is the old Valero LP (VLI) which has been ripping higher almost daily. Even yesterday when the stock was downgraded by one of the brokerage houses the stock was up nearly 2 points at one juncture yesterday and still closed higher by 1.33. These guys are refining gasoline and with the pressure on gasoline and increasing demand going into the summer, these guys are getting attention. As always its hard to buy 'em when they are soaring but if gasoline is headed for 4 bucks a gallon, these guys are poised to do well. There is also the General Partner Nustar Holdings (NSH) which is sitting around 28 bucks and may stand to do even better than the LP if distribution growth accellerates.

Nothing on the upgrade downgrade list this morning. Crude is up this morning as it bounces from yesterdays 3 dollar correction. Natural gas is higher as well. Stock futures are flat.