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Monday, March 14, 2011


Coming off a weekend where Japan and the earthquake have been the focus, we see that influence strongly affecting trading this morning with stock futures down ahead of the open.

Both charts dont look very good this morning as the dow looks like it wants to break below support the first chance it gets. MLPs are trying to hold minor support at 360-65. Its 350 to me that is the place where we really have got to pay attention to. One thing we can say for sure is that the unrelenting march to 400 on the MLP index looks overwith for time being. I have argued for a long time that the breakdown in MLPs would come with a breakout higher in yields. So far that idea hasn't worked very well as yields have moved up with MLPS squeezing the yield spread down to levels we have not seen since early 2008. Such is the normalization process. However looking at the yield chart of the 30 year, it looks like we may be ready to start another upleg higher, or at least to the top of the recent trading range which is between 4.50 and 4.80%

Of course with everything going on with the world there are no guarantees. Considering how much has happened in the last few weeks its a small miracle that markets have held up as well as they have. How much longer they can keep this going remains to be seen.

Martin Midstream Partners (MMLP) is getting a boost this morning as Citigroup upgrades it to buy from hold. And Steifel Nicholas is starting Linn Energy (LINE) at a buy and a $43 price target. Also this morning we have some pre market action in K-SEA (KSP) which is bidding 8.00 and thats up 1.50 from the Friday close. Kirby Corporation(KEX) is buying K-SEA for either $8.15 in cash or a cash/stock combination worth about the same. K-SEA will become a wholly owned subsidary of Kirby.

Elsewhere this morning we have lower stock and crude oil and higher nat gas and interest rates. In fact nat gas has suddenly shot up 4% on Barclay's saying it would take 1.2 b units of nat gas a day to replace the nuclear plant power in Japan. No news or important reads from over the weekend. So we shift our attention to the open.

Some of the video no doubt has been shocking from Japan and we have more here courtesy of the BBC which has them all on one page.

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