When you look at this chart the answer clearly is no. Even with Friday's huge gain of almost 9%, which btw was the biggest one day gain every for mlps...the chart overall is still in sell mode. The damage this month has been so extensive that a huge bounce on Friday did not even wipe out the losses for the week, let alone for the month.
However you have to start a bottom from somewhere and 210 seems as good a place as any. And at least the trip back to 240 puts us right at the 2005 base. And that is a far better place to live at then 30 points or more below.
How will we know if things have changed? Well one day at a time. First off followthrough today might be nice to see. Also the technicals on the chart (MACD for one) are still in sell mode. Moving averages suggest we could go to 255 in the context of this big bounce before being rebuked. Now in my world we go to 255 and then pullback into that 240ish long term base and hold it. That would be a good outcome. But i am always the optimistic dreamer. And of course the overall market will be having its say on stock prices. But at least from the standpoint of mlps the extreme pressure seems to be off for now.
Energy prices are rallying this morning on the back of a falling dollar so that gives a bit of a tail wind. No corporate developements and no upgrades or downgrades so far. Reuters had this mlp summary piece over the weekend. Stock futures are lower by 100 or so dow points but off the lows of the morning.
I hope you all had a nice weekend away from all this stuff. I needed to recharge my brain after all that action. A few of you hit the tip jar last week..thank you very much. You bought me a nice cigar and beer and i enjoyed it very much while watching football. Also some of you have been indulging in Mystic Monk Coffee (link on the side). In these troubled times coffee what better way to escape then to enjoy java roasted by Monks in Wyoming!!!!
joseph cioffi's Source Page - Associated Content
18 comments:
Still no catalysts for the MLP sector to mount a sustained rally. Economy still a mess, borrowing costs are higher, still alot of unknowns. I hope we hold the gains, but I am not counting on it.
The MLPs are going to just give it all back, we know it. That rally on Friday needed follow up and we aren't getting it.
There are only 2 catalysts imho that are possible.
1)Aquisitions of MLPs in mergers or buyouts setting a higher value for these assets.
2) Easing of the credit crisis to the extent that debt financing is readily available at reasonable ( but somewhet higher rates ).
HS
"The MLPs are going to just give it all back, we know it. That rally on Friday needed follow up and we aren't getting it."
The situation with MLPs speaks for itself. Whining endlessly about it helps nothing and has become a real irritant. Please stop it. Try to be constructive.
Market going back down the shitter. I guess the US govt will just have to do an equity market bailout next and dedicate $1 trillion to going long S&P futures...
The whining is ok, its a sentiment gauge.
"The whining is ok, its a sentiment gauge."
No. It is juvenile, annoying, pointless and utterly useless to others.
People need to grow up and stop whinning or just sell their MLPs, be done with it and go away.
Bruce Sherman
Oakland, Oregon
BPL -3.25% on 40,000 shares! The liquidity just continues to get worse.
The MLPs need to stop laying pipe and start buying back units. If the oil and gas companies need more capacity let them front the money for it.
BPL just lost another 1% on an additional sale of 1000 shares. This market is a fraud. The price discovery aspect of markets has become unhinged. There is no correlation between prices and reality.
"The MLPs need to stop laying pipe and start buying back units. If the oil and gas companies need more capacity let them front the money for it."
Agreed except instead of buying back shares they should be paying down their revolvers. MLPs need to dramatically reduce their capital needs even at the cost of reduced growth.
HS
"MLPs need to dramatically reduce their capital needs even at the cost of reduced growth."
Some MLPs have prefunded significant amounts of capex. CPNO and MWE are two examples.
Bruce
Bruce:
Good for CPNO + MWE.
For the rest, they need the create the impression that Equity financing ( and god forbid the possibility ofdefault ) is off of the table.
HS
"For the rest, they need the create the impression that Equity financing ( and god forbid the possibility ofdefault ) is off of the table."
MWE and CPNO are but two examples. There are others. In addition, many have untapped credit lines--some of which were increased by the banks recently, despite the turmoil.
For the top MLPs, the risk of debt default is extremely low.
I continue to believe that best strategy for the individual MLP investor is to identify the most desirable MLPs and place limit orders at or below the 52-week bottoms. Accumulating in this fashion will, I am convinced, prove to be a very, very lucrative long-term investment (although there may well be continued volatility for some time--but again, I am thinking long-term).
Bruce
The Reuters piece is very good, thanks for posting it. They reinforce what I was already thinking : "the market is clearly not focused on fundamentals", "redemption driven selling by hedge funds", etc.
Any QELP holders out there? This thing is a frickin disaster. I have been trying to get through to the CFO/IR clown, Jack Collins, to no avail. I've tried 405 702-7460 and messages go unanswered.
Has anyone else tried to make contact?
Conspiracy Theory?
1) Paulson's GSE bailout damaged small and regional banks by trashing the value of preferred GSE shares they held as part of their core capital.
2) Goldman Sachs + Morgan Stanley to become bank holding companies.
3) Merrill Lynch + JPM Morgan claim regional + small banks might suffer real estate writedowns due to the proposed Federal bailout plan and Merill+ others recommended selling the small and regional banks.
4)Goldman, MS, JPM, BAC, now might buy up these regionals and small banks on the cheap.
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AT 1:30est
Barney Frank is supposed to speak about the Bailout.
hs
Barney Frank is an idiot. He took more PAC money from FNM and FRE than anyone else in Congress. We need to clean up DC. Right now our entire govt is run by the Keystone Cops. Democrats and Republicans are both ignorant on financial issues.
This is Japan 1991. Get ready for a decade of going nowhere.
"Barney Frank is an idiot."
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The issue is if Barney Frank may offer some clarity about the proposed bailout.
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When you think about it Congress works very similar to Subprime Financing.
They do something they know is stupid( get paid for it through campaign contributions ), then let someone else gets stuck holding the bag ( our children and grandchildren ).
HS
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