FED MEETING AND A SEA CHANGE?

One of the dangers of reading too much into very short term moves is that you make decisions on events that are temporary before the primary trend moves on. On the other hand sometimes they ring the bell when there are only one or two people in the dining room. We have seen a breakdown in yields since April and in the last 2 weeks the 10 year has pushed itself down to new lows in yield as we sit this morning barely north of 2.80%



However take a look at the 30 year yield. There was a day when we actually paid attention to the 30 year instead of the 10 year but i think its time we look. Notice that the 30 year went to new lows on July 1st at 3.85 and has not sold down to new lows in yield and is holding the 4% level. This may not mean anything however with the fed meeting today and the feeling they may fire some more bullets out of the money gun, might this divergence be signaling a (final) bottom in long term rates? If their aim is to steepen the yield curve, what if bond traders finally decide they've had enough and begin to rachet long term rates higher?
And what of MLPS? Yesterday saw a 3 point plus loss after being down 5 at the lows on a day when the overall market closed a little higher. Again just one day but what if the stalling of MLPS in here is a signal that money may start to come out of yield stocks? Is the leadership of mlps finally coming to an end here or, as i said earlier, am i reading too much into this short term blip? I guess the key will be to watch what happens after 2:15pm when the fed announces what they are or aren't doing and see the reactions of the bond market.

Lots of red on the tape out there this morning with stock futures down and energy futures down ahead of the fed. No news on the mlp tape this morning. Gold is down and the dollar is up. Yields are a little lower this morning with weak markets. Credit Suisse ups its target price to 27 bucks on Western Gas (WES) from 24 while keeping the stock at a neutral.

So we have food for thought here this morning ahead of the open and ahead of what could be a decisive day.....or perhaps not!