ITS ALMOST OUR BIRTHDAY!

In 5 days we will be commemorate the day when we were staring into the ultimate abyss at 145 and small change on the MLP index. Today we sit at 362 or 2 1/2 times higher plus 8 distributions (assuming you were in the right mlps) and just off new all time highs while the overall market remains 3000 dow points below its peak. A great ride it has been and it has come with interest rates down near zero on the short end and down to 3.50 on the 30 year. In the last couple of weeks we've seen long rates break out of a base and yesterday we closed at 4.40%. So far mlps have shrugged this off and have just marched along higher. At some point this will become a headwind. I have argued with 2 failed auctions that the rise in the 30 year is the market signalling that it is no longer willing to accept sub 4% paper while the fed is flooding the economy with money. The rise to 4.40 has occurred rather quickly and we could see a pullback in here on yield. The bull market in MLPS can keep going but at some point rising long term yields if they continue will exert a negative headwind. We just may not be here yet.

Plains All American (PAA) becomes the latest MLP to do a stock offering and why not with the stock price near 52 week highs. Not much else on the news front this morning and nothing so far on the upgrade downgrade list. Stock futures are lower ahead of the open. Energy is down except for nat gas which is unchanged. Nat gas did a nice reversal yesterday as a successful retest of the lows of a few weeks ago. Now we watch to see if a double bottom base is in for a short term run above 4.25. The dollar is lower and bond yields are lower after yesterday's big surge higher.