ENERGY TRANSFER IS OUR ALCOA

FIRST OUT OF THE GATE WITH EARNINGS.

Actually both Energy Transfer Partners(ETP) and Energy Transfer Equity (ETE) start the ball rolling with regards to earnings in our group. Numbers look pretty solid but we'll see whether this is already baked into the cake.

This morning Wachovia starts Copano Energy at market perform. Speaking of which get ready for another sharp open higher in the Natural Gas complex. Its up 11 cents in electronic trading so the UNG ETF will likely open up close to a dollar. Since i am long under 42 and this was a short term trade i'm taking profits this morning. My July 45 calls should open on a double for me so i will be letting those go this morning. Am i leaving money on the table? Probably. But this was a short term play and there will be more opportunities. Weather next week looks hot and humid for most of the east so that may begin to play into this. Ultimately the gas contract should head back to a 7 handle. Meanwhile stock futures have sold off since 5am when they were up 5...now down 2 on the S&P while the 10 year is down below 5% now. Flight to quality continues on the subprime...we in MLP land stand to benefit from this...as long as the stock market selloff does not get out of hand. The index sits just under 340 in breakout land and at new all time highs. Until proven otherwise the path of least resistence is higher. I use this phrase if only to annoy a certain person!

BTW with the prospects of earnings and distributions watch Crosstex (XTEX),(XTXI) and Hiland LP (HLND). Both companies did not raise their distributions last quarter for one reason or another. These stocks have been on a slow climb with the rest of the group and if they indicate that their distribution increases will resume soon or if in fact they raise their payouts when they announce next week then we could see nice runs in these 2 issues. However if they still indicate problems and distributions remain static, then we could see several points come off and another quarter of underperformance.

Note the chart above how much the MLP index has outperformed the S&P. Hiland LP has held up pretty well against the market but below other MLPS in the last 6 months. Crosstex has lagged everybody but at least the 2 distributions in this stretch makes it a little better.

Since i started blogging Natgas is now up 16 cents while stock futures continue to weaken. See you at the open...news as it breaks.