TRADING RANGE DEVELOPING

Given that this bull market or bear market rally or cyclical bull within a secular bear or whatever you want to call it is coming up on its one year birthday i think its time to consider whether we are beginning the process of building some sort of top that may establish a longer term trading range. Granted i have no clue whether im going to be right about this but it's clear to me that the uptrend that began last March has changed character a bit since the dow hit 10700 a few weeks ago. We made the drop to the logical bottom at 9800 which was where the 200 day moving average was and now we are moving back to the top of the range at 10700. Lots of money can be made if we become trapped in a 900 point range for awhile. Once we get back to near 10700 we'll see if the market has the force to take it through there. So standby for the approaching test.

MLPs on the other hand are approaching there 300 high and its less clear to me whether our little group will go into a 270-300 trading range or if they can continue higher. Clearly a break above 300 can mean a ride to new all time highs as measured by the index (340). The outperformance continues and shows no sign of abating.

We have earnings this morning from Constellation Energy Partners (CEP) and the bottom line here is no distribution through at least Q4 of 2010. With no distirbution it makes it pretty much dead money here at best. The company does say its focused on the continued reduction of debt levels.

Premarket indicators are firm. Stock futures are higher. Rates are flat to a little higher. Energy is higher except for nat gas and the dollar is stronger. So it looks like we will start with buyers in control. Nothing going on as far as the upgrade downgrade list.

A couple of links here as Investment News writes a nice little piece on MLPS. And we have this on Seeking Alpha which is about an index approach to mlps. And the index is called the Cushing 30 .