2009 BEGINS!

Its day one and we start the year at 176.29. We started 1/2/2008 at...are you ready for this...301.13 so we have 125 points of decline...0ver 40% on the index and we only need to go up about 50% or so to pull back even. Good luck! We have a lot of questions ahead of us and we have to tackle those questions rather quickly.

First off will be the fate of distributions which in a few short weeks will be announced. We pretty much know which ones the market hss already told us are getting cut. All you have to do is look at the prices and their yields. And it is amazing to me as i look at some of the message boards how many people have their head in the sand about this. Someone for example was opining on the Hiland LP (HLND) yahoo message board about getting the 76 cent distribution next quarter. Wnen paying out the distrbution wipes out 1/4 of the equity value of a stock by just going ex-distribution..then Houston we have a problem here. This is but one example. However as i have pointed out before, the game this quarter will be figuring out which ones cut by less than forecast coupled with a rally in junk yields. That condition will be a real short term money maker.

The mlp index chart is about as ugly as you will ever see it. We have immediate challenges above us as we approach moving averages. 180 is the first hurdle. Frankly i would prefer a long grinding basing action which frustrates everyone and we go nowhere fast in either direction.

This morning we had stronger stock futures earlier but they have weakened. The energy complex is sharply lower on the back of Wednesday's gain. The dollar is up. Rates start the year near zero. Maybe that's the trade here...to short treasuries...which seems to be where everyone is going.

MLPS that are trading at call option prices showed some movement Wednssday. Crosstex (XTXI) for example was up over 1 dollar and that's a lot for a stock that started the day with a 2 handle. I would look for more moves like that over the next week or so as we see a January effect of some sort. No corporate headlines this morning as we might as well make it a 4 day weekend. I would not read too much into what ever happens today. We need 5 days or so of trading to get a feel for where we are going short term.