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Tuesday, January 04, 2011


We traded solidly above new all time highs yesterday only to close just under it as a few sellers arrived in the last hour. Still it was a solid up day for the first trading day of the year. The overall market closed up 100. But the star of the day was Natural Gas which broke out of its triple bottom base on huge volume. And this morning the run continues as we at at 6.40 on the UNG pre open. Target is 6.75 looking at the chart.

BTW as i have mentioned i use UNG or UNL as illustrations that represent the nat gas contract. When i trade nat gas i use UNL as its a 12 month futures contract unlike the UNG which is front month loaded. In contango (when back month futures contracts sell for higher prices) its a wasting asset. UNL is a 12 month mix of futures gives you a much less wasting asset. But this is for short term trading purposes only and not for long term holds. If you believe in rising nat gas prices you are much better off in stocks. The next thing to look for here is a pullback to the moving averages as they rise and begin to cross to a positive slope. For mlps, this rising nat gas price is another tailwind.

No news of consequence this morning in MLP land and no upgrades or downgrades so far. Stock futures are a little higher. Crude and as mentioned nat gas are higher. The dollar is lower and gold is taking a hit this morning; down 14 bucks as of this post. Interest rates are flat so far as we wait for economic numbers and the fed book later today.

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