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Monday, June 20, 2011

CRUDE AND NAT GAS START LOWER!



Energy is selling off pre open which should extend into the market open this morning. That and a softer tape probably means the same for MLPS which are going to open down and probably test that 350 level fairly quickly.



The mlp chart above is looking rather dicey to me and if we decisively break through that 350 level we could head down to 335 in a hurry and maybe as low as 320. Meanwhile the chart above the chart above is the nat gas chart which continues building this long complex bottom. The last trip up i thought surely it would break out to new highs and, once again, it turned back down toward the lower end of the range. $4.00 has held as the bottom recently so i will be looking when it gets there (if it gets there).

Back to mlps there are headwinds for sure and not the least of which was the passing by the Senate ending the ethanol subsidy. To repeat what i posted when it happened, if they can pass this they may pass other things including taxing mlps. Now passing and becoming law are 2 different things and a tax change has to come from the House of Reps which means odds are pretty low that this will happen. Still it gives one pause and the action is to shoot first and ask questions later.

This morning on the corporate side its typical end of quarter action. No news and no upgrades or downgrades that we can see. Stock futures are a little lower and the dollar is higher against the euro. Rates are flirting with all time lows again. Crude is down over a dollar and approaching 90 bucks while nat gas is a couple of cents lower.

2 comments:

PC Scipio said...

Not so sure about the House stonewalling an MLPS tax change. Closing a loophole is not the same as raising taxes when it comes to explaining it to the Republican base, particularly since not that many will be affected. There's even talk of raising the capital gains tax rate.

joewxman said...

Politico agrees with you. Good piece today that makes that point exactly. http://www.politico.com/news/stories/0611/57382.html