RALLY MODE AS RATES KEEP CLIMBING!

We continue to move right along here as markets are set to zoom up about 100 dow points at the open. MLPS are set to move along higher at the open as well after a fractional gain higher on the index in yesterday's trade. Everyone's attention is on the GM IPO this morning so while the world is distracted we can look around without being noticed. MLP closed end funds got a mention in the Barrons blog section. Seeking Alpha likes Energy Transfer Partners (ETP) over some other mlps and a long piece on why. Investerplace has a bit of a buyer beware piece on MLPS when it comes to high yield. And there has been some attention being paid to the muni bond market as there has been a big sell off there. Seeking Alpha has more on something that so far has not had much impact on other markets.

And speaking of other markets, the bond market continues to get my attention. We have clearly broken out of a bottom as far as yields go. We've had 2 failed auctions and i am sensing more and more that we may be at the beginning of something much bigger that we will be dealing with in the next few months. The steepening yield curve is telling us one of 2 things. Either the economy is about to take off, or bond investors are saying that yields are too low based on future debt and inflation. If these were normal times i would bet on the economy taking off. But these are not normal times. I'm beginning to believe that we could be at the beginning of the greatest of unwinds in the bond market and this will have huge ramifications as far as stocks and mlps are concerned. Suppose its more than just an inflation fear. Suppose its the fear of the US losing its AAA grade? Suppose one of these Europe like contagions begins here? Right now we are not there yet but there is a tipping point out there somewhere. And we can safely say today is not that day.

This morning in MLP land we are pretty much news free. No upgrades or downgrades. Stock futures are sharply higher. Yields open higher after jobless claims. Crude is up and nat gas is lower ahead of inventory numbers. Nat gas closed above 4 bucks again yesterday. 4.20 is the recent rally high and it seems to be that we are headed back there to attempt a serious breakout. That could come if we get bullish numbers at 10:30am. Also i mentioned yesterday that the weather pattern will turn favorable later next week for nat gas bulls. Weather models continue to point in that direction of colder than normal temps for the midwest and northeast after Thanksgiving.