WHO WILL RESCUE US?
The real question is....will the demise of Fannie and Freddie mark the final bottom? Is this the kind of event like Continental Illinois, Penn Central, etc which marked the end of a bear market? And also for MLPS as i posted over the weekend have been impacted by the seizing up of the credit markets. If this event causes yield spreads to contract and get the banks to start lending again to businesses then we will have put in a final bottom and off we go.
Despite the selloff last week the charts have not broken down to new lows. Now this morning we have tailwinds everywhere and I am going to be severely disappointed if we cannot have a big up day off of this (at least 2% on the mlp index) . BTW Cramer goosed Energy Transfer Partners (ETP) Oneok Partners (OKS) and a couple of others in MLP land on Friday's MAD MONEY so those 2 should get an extra kick. Stock futures are soaring with a 250 pt up open in the cards. Crude and nat gas are higher this morning with Hurricane Ike heading for the Gulf of Mexico after it crossing Cuba. And it looks like its heading for the rigs in the NW Gulf. No corporate developements and no upgrades or downgrades.
One thing about today's rally that is also crucial. Watch what happens after 10am. We need to see strength build all day long on increasing volume to signal to us that this is not going to be another one day wonder. Ideally after the initial rush we get a little pullback followed by another round of buying between 10:30am and noon..hold on to most of that during lunch and then another afternoon surge. And of course MLPS need to just go up!
joseph cioffi's Source Page - Associated Content
1 comment:
Joe, one thing to look for is how the preferred market handles this bailout. The FNM and FRE preferreds did not get dividend protection like many had hoped, and this could hamper the preferred market. And if that happens, the other yield stocks can suffer. This is how these markets have behaved.
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