OIL, NAT GAS COLLAPSE

WHO SHALL WE FOLLOW?

Back from the Labor day weekend...summer vacations are done...and now we start the week with energy markets in full blown collapse mode as Gustav was a buy the rumor sell the news event. MLPS had a good week and charts are suggestive of further upside but there is going to be pressure this morning as energy stocks will be sold at the open

Lately however we have seen mlps go their own way and outperform energy stocks on both up and down days so i would expect after a soft open we could see buyers come back in. This may happen as stock futures are sharply higher ahead of the open. The weekly chart on the MLP index is on the verge of giving a buy signal and i'm liking the action.

The USO and UNG charts which are proxies for crude and nat gas look awful and point to further downside in the commodities. And today's open barring a massive reversal puts them in breakdown mode.

I was hoping to walk in this morning to some corporate developements like a takeover or something exciting but so far nothing on the tape and nothing on the upgrade downgrade list. The tropics remain extremely active and Hanna is next on the agenda for the East Coast this time...and this would be bearish for oil prices as it drives down demand.