CRUDE OIL GOING ONE WAY, NAT GAS THE OTHER!

Since i blogged Friday about a natural gas trade i thought i'd start the day with what has happened to the 2 commodities in the last few weeks. Crude oil has broken out above 70 dollars and sits over 72 this morning. Meanwhile in mid June natural gas has diverged and went the other way...its down from $8.20 in early June to Friday's low of $6.40.

The decline in my view has taken out all the weather premium whether it be from heatwaves to hurricanes. Gas is up 2 cents this morning. I built a position in the US Natural Gas ETF (UNG) which follows the nat gas contract. Its down from 50 to 41. I also bought a bunch of July 45 calls but the timeframe here is very short and i may lose on those. But the first hurricane threat when it comes could drive the NG ETF back to 50 in a hurry. Remember folks this is my personal view and if i'm wrong it could get messy. No guarantees.

Meanwhile mlps start this morning with the AMZ MLP index at a new all time closing high and at the beginning perhaps of another chart breakout. I am looking for today's action to take us either decisiviely above the breakout point or back into the 320-335 trading range.

If this is indeed a breakout and the beginning of another upleg in the bull move that began last October 5.25-5.30% on the 10 year has to hold. If that is the case i think this next upleg will take us to the 370-400 level on the index. But first things first we need to confirm this breakout with some volume today.

The only corporate news this morning comes from Holly Partnes (HEP) which is announcing that it is building a new pipeline. Other than that the crickets are chirping this morning on the news front and there are no upgrades or downgrades so far.