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Wednesday, January 19, 2011


We have some headlines this morning with a distribution hike for TC Pipelines (TCLP) which has been one of the better MLP performers from the last quarter as it has run from 38 to 53. My guess is a little selling on the news in the short sighted short term.
Crosstex Energy (XTEX) has made a similar percentage move from 10 to almost 15 which is a nice 50% gain. And this one went to a buck in the melt down. They announce a distribution hike for the LP and a dividend hike for the GP.

Here is another one that has jumped nearly 50% in the last 6 months; Targa Natural Resources(NGLS) and they are doing what all mlps do every six months or so and that is a public offering of shares. The stock is down a buck in pre market trading.
Those are the three big news makers this morning. From last night we have some nice news from Oneok (OKS) which raises its guidance for 2011. The stock should be a nice winner this morning and open up a buck or so. Its bid up in the pre market but no trades yet.
The stock has been going sideways for the last couple of months with the mlp index. But today we may see an upside breakout. That will probably give the mlp index a bit of a boost today.

Overall markets are a little soft this morning ahead of the open despite good earnings from Apple and IBM. Goldman earnings are bringing in some selling. This rally since the mid November low is now taking us on the doorstep of 12,000 on the dow and 1300 on the S&P. I've been cautious as you well know and fighting this every step of the way the last couple of weeks. I still think at some point attention focuses on rising rates on the long end. Stock futures this morning are lower. Rates are a little lower ahead of housing numbers which are not going to be good. Crude and nat gas are up. Weather continues to remain cold in the east for the remainder of the month and another snowfall is coming for Friday. The euro is rallying as the dollar breaks down.

BTW keep an eye on the rate market. Yesterday we saw rates spike up in about 3 minutes by 10 basis points. No one was sure what spooked that market around 9:20 am yesterday but moves like that are a bit disturbing. 4.60% on the 30 year and 3.50% on the 10 year are, i believe, the tipping points for interest rate sensitive investors that could cause sellers to being moving out of MLPS, just like they came in during the rate drop last April from 4% to 2.50%. But for now, yesterday's pullback was nothing more than a little profit taking from new all time highs.

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