A BOUNCE, YES BUT

WHAT HAPPENS NOW?

The bounce was so overdue that the worry was it would never happen; and that is usually at the point which makes it imminent. So we had a nearly 8 point gain on the mlp index and lots of mlps moved 1 to 2 points higher. Okay today is a new day and one day means nothing without follow through so we will be looking to see if we can make it 2 days in a row. The first challenege here will be to get through last week's high at 275.

And if we get through 275 the 34 day moving average resistence sits at 278. So we have lots of headwinds to fight and the markets are starting things off on a sour note with earnings related weakness sending dow futures down about 100 points.

Oil meanwhile is keying off Tropical Storm Dolly which is heading for the US Mexico border for landfall tomorrow morning as a category 1 hurricane..maybe a 2 at most. The USO chart continues to look pretty toppy to me. We had the initial break under the trendline last week and there could be a opportunity setting up here. If crude rallies it could take the USO back to 110 or so.

Since we now have a way to play this with the Ultrashares doubleshort Crude (DTO) i will be watching closely. If the USO can push back to 110 i will be building a small position in the DTO. I still am long the DUG but i have sold August 32 calls against my position there as a hedge. The premimum was so attractive it was hard to resist and since i have an average price there of 29 i decided to protect that to some degree.

The dow chart is a mess but at least we are not in freefall. Bottoms being processes and not necessarily events, today's action continues to be part of that process and frankly i always like down opens like this as they have that chance to rally 'em back by days end.

And one last chart this morning. If crude is destined to fall over the next several months Calumet Specialty Products (CLMT) stands to benefit. Notice that hideous decline but the company has done all the right things to stop the bleeding. The distribution has already been declared for the quarter and it was not cut like last time. Looks like this one is trying to build a base.

Some Semagroup Energy Partners (SGLP) news as 2 creditors put in a new board and say they remain supportive of existing management. Plus lawsuits abound as the vultures circle. A shock there! No other headlines this morning so far and nothing yet on the upgrade downgrade list.

A few of you guys have thrown in some coin into the tip jar for me and i thank you very much! I am toying with the idea of setting up a subscription site to go along with the blog and i am trying to work out the details on how to go foward and what sort of focus it will have. I have mixed feelings about going to some sort of pay site because i love to blog and talk about markets ...but we love to eat around here as well! I know we're all adults but i would hate to put up a trade idea that winds up backfiring. So stay tuned for details as i figure this out. In the meantime...headlines as they break.