THE TEN YEAR YIELD POISED FOR A BREAKOUT?

One standout move yesterday was the 10year yield which spiked up over 15 basis points and now sits near 3.85. We are heading back to the top of the trading range and looking at that chart, it could be that we may finally be poised to break above 4% for the first time since back in fall 2008. Also when you look at the weekly chart, all the technicals seem to be there for a spike up above 4. Moving averages are crossing and turning positive. MACD ready to cross and turn up. Maybe today is the day for a run to 4 if the seven year auction goes as well as the 5 year didnt go yesterday.

Perhaps this spike up is the reason why MLPS may have hit some headwinds recently as we continue to congest around the 300 level (plus or minus a few points). Support continues to hold as the chart indicates. However remember that 300 is important both on the daily and weekly charts as the index spent alot of time trading there and for many its a get even get out point. The 10 year headwind is a bit of a concern as yield spreads continue to revert to normal.
Also take note of the fact that for the first time some corporate bonds and bond spreads have turned negative against the 10 year for the first time in history. This is probably a function of the huge government debt load and the sovereign debt crisis that is causing investors to demand higher yields from government instruments. But still this can't be a good thing in the long haul and we should watch the situation carefully because at some point, markets are going to balk. But for now the overall market trend remains higher.

Stock futures are moving higher this morning along with crude. Nat gas is 2 cents lower as inventory numbers loom there later this morning. The 10 year yield is at 3.84 as we wait for the 7 year auction later today.

Back to mlps no corporate developements. Deutche Bank is announcing coverage on some of the coal names and it starts Alliance Resource Partners (ARLP) at a hold with a 44 dollar price target. Stock is just under 42.

Sorry for the lack of posts yesterday as my schedule became a bit of a nightmare. But its back to normal today.