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Friday, September 16, 2011


When you look at the 2 snapshots of the MLP index and the Dow Industrials you come away with 2 different views. In reality we have 2 different markets going on here. The dow has ralled back to the top of the recent 2 month rage which is bound by 11,600 at the top and 10,700 at the bottom. We have rallied straight up from 2pm Monday and that has seemed to have come to an end this morning as markets after opening up have turned lower. MLPS have come back to the 350 level but has probably a less negative looking chart. Both markets are in downtrends but clearly the attraction of 6% yield continues to drive money here. My concern going foward is this. If the overall market is going to take out that 10,700 bottom what will be the catylist? Will it be an unraveling of Europe? And what if a major bank goes down like Barclays ( im not predicting here just illustrating), could we see another great mlp unwind? Im not predicting these things but im beginning to get the feeling that we are at the beginning of another 2008 like unwinding. MLPS are down nearly 5 points this morning. It could be one of those options expiration/futures distortions that we see here every once in awhile. But i think given what is happening around the world we need to pay attention.

Crosstex Energy (XTXI) is back almost to 15 and is up fractionally today. QR Energy (QRE) continues to benefit from the upgrade a few days ago and is now over 21...up another 1 and small change. Kinder Morgan (KMP) and Enterprise Products Partners (EPD) are solidly lower and are leading the mlp index down.

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