MLPS VS 10 YEAR RATES AT A

CRICTICAL JUNCTURE

If you want a reason for the recent correction you need look no further that the behavior of the 10 year bond verses the MLP index and you will note the upleg in the 10 year rate of the last few weeks in co-inciding with the reversal at 336 on the MLP index and the trip down here to 322. Friday's bounce off Thusday's nearly 3% drop left some MLPS behind but 1st day bounces often times don't carry everybody along.

Note that the 19 year is now resting just under the 4.90 breakout point. Lots of economic and fed data this week so we should get a decisive picture of where rates will go. And if 4.90 is taken out there really isn't any reason why the 10 year rate couldn't rally back to 5.25% which is the high from last July. No doubt in my mind that this correction in MLPS will deepen considerably if 4.90 is taken out.

The XOI index remains in an uptrend and at least there won't be an additional negative pull from an energy sell-off. However should we start to see bearishness develope here it would only add to pressure.

Its a quiet morning so far here in the pre open with no corporate news and no upgrades or downgrades so far. I'm hoping that Thursday was a climax bottom at 319 and change but if it isn't a quick trip down to 313-314 is the next line of defense at the 89 day moving average. Longer term the weekly chart of the MLP index remains bullish.