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Tuesday, January 18, 2011


Back from a long weekend and a bit of an ice storm this morning. Fortunately its above 32 degrees so the worst is overwith for me anyway. The focus over the weekend and this morning (other than the Steve Jobs obsession at Apple) is the 7 week rally in the dow and whether its time for a pullback.

The prior leg in this rally began on August 31st and we had 8 up weeks in a row before that little mid November pullback and now we're at 7 in a row. On that basis a pullback is definitely in order and could come at anytime. But im not sure what the catylist will be. Is it 100 dollar crude? Is it buy the rumor sell the earnings? Its not Apple Computer and the Steve Jobs secrecy. I have been arguing that it could be rates. And it may be an upside breakout of 3.50% on the 10 year note. We're at 3.30% this morning. I also think that becomes a headwind for MLPS which continue their march of new all time highs and maybe 400 on the index. Its a less than 10% trip to get there. Still for me its a time for at least a breather and when it comes, it may be out of left field.

Copano (CPNO) is making news this morning as they do more to increase their NGL capacity at Eagle Shale. Buckeye(BPL) is buying the rest of Bahamas Oil Refining Company Intl that it doesn't already own. Western Gas Partners (WES) is gathering gathering and processing assets. Earnings news should be getting underway this week along with the slew of distribution hikes. Enterprise Products Partners (EPD) the big boy in the group announced its 26th consecutive hike on Friday.

Market is opening flat this morning as futures are indicating at this time. Gold is up and the dollar is down. China was down 3% in Monday trade but rallied back 2% in Tuesday trade. Crude is down as they fixed the Alaska Pipeline oil leak but nat gas is up on lots of cold weather in gas using areas is forecast for the rest of the month.

The chart is still looking like a breakout is coming. Using the UNL for a proxy here, its got to get above 36.

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