HOLLY EARNINGS ARE OUT

LEHMAN CUTS NUSTAR

INTRA DAY REVERSAL...NOW WHAT?

Okay so yesterday afternoon we had a pretty sharp intra-day reversal as the MLP index was up 2.40 and then fell below the flat line to a slight down close. Now this probably was related to end of month activity and some profit taking or profit booking. But this was the first time we saw anything resembling a reversal in many many months. Could this be a sign that we may have finally reached a short term top? Well the short answer is "who knows" Bottom reversals usually work pretty well but top reversals are a little harder to figure. First off it was just one day and donwside follow-through would need to show up on the tape today. And again please bear in mind we're talking about short term noise here. But i will say that the upside move we've enjoyed has con-incided with the market rally. Yield compression has taken us where there isn't as much yield support as we're use to. So if a broad market sell-off were to occur we would probably follow along at least for awhile. But for now we watch and wait to see what developes. Stock futures are higher this morning and energy is firm...10 year rates supportive.

Holly Partners has gone parabolic and we have earnings out this morning. We'll see if the numbers are priced in. Lehman Brothers (I am not sure which one) is downgrading Nustar from overweight to equal weight which is their version of buy to hold i guess. The morning is young but this is all i have for now on this front.

By the way some of the pullbacks yesterday were quite dramatic. Take Magellan Midstream (MMP) which traded above 53 at one point yesterday up 2 and change...then dropped after 2pm to 49.66...down 1 and change...and closed down about 20 cents. Its not often you see a nearly 4 point range in one day on an MLP.