ETP BUYS SUN!

Short headline but right to the point this morning.Energy Transfer Partners (ETP) which has been a chronic underperformer in the mlp group made a big purchase today as it takes out Sunoco (SUN) for 50 bucks a share..1/2 in cash and 1/2 in stock. Both stocks are up on the news with SUN up nearly 8 bucks and Energy Transfer is up 1.60. Energy Transfer Equity (ETE) is up 1.92. The move diversifies ETP holdings and might be a driver in the stock price going foward especially in the NGL and logistics markets which have been quite strong. In face ETP is approaching a 52 week high and may challenge the top it made early in 2011.

MLP meanwhile as a whole continue to hold their own in here although still off their highs. Markets are down today but the group is up 1.75 as of this posting. Earnings news from Holly Partners (HEP) and its one cent distribution hike was pretty much in line. So far except for Nustar (NS) which took a hit on its earnings, the corporate numbers have been typical of the group and distribution increases have been priced in.

410 on the mlp chart remains the near term challenge and 380 is the near term support. Neither side seems willing to give at this point so we will follow the overall tape and see where it takes us. We are into May where significant tops were built a year ago. So far it appears we may be following a similar path.

Nustar (NS) put up earnings and said all the right things on earnings but not on distributable cash flow which it said was well below 1x.. The stock is down 2 dollars on the news. When your paying out 1.09 and only have 60 cents, this could be a problem down the road. Still the company says everything business wise appears to be in good order.

MLPS as a whole are down today as market attention remains on the NASDAQ and Apple. Energy stocks dont seem to be participating all that strongly in the rally which is pretty narrow in scope.

MLPS CONTINUE TO STRADDLE!

MLPS have not exactly set the charts on fire lately as they continue to stairstep their way lower from the 410 high back in late January. At first it seemed that mlps reacted to the push up in yields to 2.40%. That took the index down to 380. But since we hit that 2.40% level, rates have turned lower again.

 

The latest move down from 2.40 has brought us under 2% occured rather quickly. That move is coming as Europe continues to basically unravel on a daily basis. The overall market continues to de couple away from that. But at some point its going to matter. If yields break below 1.70 it will be a sure sign that decoupling from Europe is the wrong play. MLPS may benefit from the tailwind of falling yields but not if it comes with an overall market meltdown. Im not predicting this but one needs to continue to watch what the bond market may be telling us.

Markets are opening higher this morning. MLPS are higher at the start. But everything is about Apple Computer (AAPL) which blew away earnings. So for now we have an up dow...nasdaq is soaring...and we sit back and watch.

     MLPS SET TO MOVE LOWER !

 

 

Getting used to the new blogger format which is a bit confusing but i will figure it out. Markets this morning are reacting to European woes as those markets sell off hard and that leaves us down over 100 dow points pre open. The mlp chart rallied nicely last week as the 380 support level continues to hold for the time being. But i think we will see a test of that level this week which is about where the 200 day moving average lies. MLPS hit their top of 410 back in late February and have not been able to come close to that high. Its a little disturbing that we see this pullback even though 10 year rates have not rallied above 2.40. In fact after that spike up to 2.40, yields are now back below 2%. Could we be setting up for a major selloff? I guess it all depends on Europe and whether markets want to repeat last year's pattern.

No corporate news this morning and no upgrades or downgrades so look for the group to move in tandem with markets. Crude may test 100 bucks if the selloff really gets going after the open. Nat gas is under 2 dollars and seems destined to head even lower.

KINDER MORGAN EARNINGS AFTER THE CLOSE!

MLP leader Kinder Morgan (KMP) will be putting up its quarterly earnings after the close today and we will probably get the usual distribution increase that comes every quarter from the big daddy in MLP land. Seeking Alpha has a piece on Kinder with regards to their distributable cash flow. Its an interesting piece in that the writer concludes that at some point Kinder Morgan may simplify its collection of interests and stocks (KMR,KMP,KMI,EPB) ala Enterprise Products Partners (EPD).


Markets rebounded yesterday and so did MLPS but you have to wonder whether it was just a one day wonder given futures are softer today ahead of the open. MLPS rebounded yesterday but the chart has that feel that the top building process continues. The 200 day moving average continues to hold at 380.06. That to me is the line in the sand. The dow chart has turned sideways and i think that a break by mlps could be a sign that the market rally may have run its course.
What has not run its course is the bear market in natural gas as we are now solidly under 2 bucks and no sign of any meaningful bottom. In fact the bears are so numerous in nat gas that we may have to look for some sort of climax selling event that might finally signal a tradeable bottom. The decline here has been nothing short of merciless.

DECEPTIVE RALLY COVERS UP WEAKNESS!

About the only thing that is up this morning is the dow industrial average which is still hanging on to a 46 point gain but everything else is selling off and Nasdaq in particular has an almost 1% loss as recent leaders like Apple and Google take big hits. Meantime i thought it might be a good idea to see if there has been any damage done to point and figure charts concerning mlps and a few other things.

Some bearish signals have been thrown by these charts. Kinder Morgan (KMP) went bearish weeks ago and the charts have a price target of 71. Note that the index itself continues to show a bullish target of 492 while bearish signals are evident. Stocks like Oneok (OKS) and PAA (PAA) continue to show bullish price targets of 100 and 112 respectively (a little hopeful perhaps) so at best lets say its a mixed picture here. Still we continue to pay attention to the mlp index and the 380 level which is wear the 200 day sits and for now continues to hold.

The index this morning is down nearly 2. Citigroup is cutting price targets on Alliance Resource (ARLP). Note to citigroup...the market sort of did that for you in the last few weeks with the stock going from 80 to 50 in a big hurry. It has rallied back to 57 on a dead cat bounce. Not much else happening this morning. No other corporate news of consequence and nat gas continues to explore the price areas under 2 dollars. The point and figure chart has a 1.50 price target for nat gas.

We'll see what afternoon trading brings but given the divergences in the tape and the nasdaq weakness, i would guess sellers will take the upper hand later on today.

Nat gas officially has a one handle now...1.982 was the last trade. And crude is selling for more than 50 times the price of nat gas which is probably some sort of record.

Markets still higher but off the highs of the day and treading water for the last few hours. MLPS up a little less than 2 points.

THE ONE HANDLE!

Get ready folks. As of this post nat gas is trading at $2.003 so we are just ticks from a one handle and i think we could see selling get pretty ugly in nat gas once that 2 dollar floor pierced. Meanwhile markets are deadcat bouncing right now with the dow up 90 and mlps up 1 and some change. Most mlps are fractionally higher except for Alliance Resource (ARLP) which is above 55 after trading down near 50 just 2 days ago.

Im thinking sellers may try and take control this afternoon after coming back from a healthy lunch. No important news items to speak of today in mlp land.

Natural gas is testing the 2 dollar level as crude oil is about to test 100 bucks. Its not looking good for mlps this afternoon. We are now down 7.63 at 381 and at the lows of the day. The dow is down 184 points.

MLPS are off over 6 points on the index as the market is selling off. The dow is down 150. 1 point plus losses in Kinder Morgan (KMP) Markwest (MWE) and others. Plains All American (PAA) is down nearly 2 perhaps on disappointment of only a 2% quarter over quarter distribution increase. Meanwhile Alliance Resource (ARLP) which has been going straight down for 2 weeks is up 1 and change in a bounce which really is no surprise.

Feels like a sea change here and MLPS are challenging the 200 day moving average here. 379.74 is where the expotential moving average sits this morning. The simple moving average is at 373.64. So keep an eye on these levels this afternoon.

Seeking Alpha has a piece on the DCF at Buckeye Partners (BPL) which leaves the writer a bit cautious. Its worth a read.

Speaking of distributions Constellation Energy Partners (CEP) doesn't have one and thats why the stock is selling for 2.89. However it was up 16 cents yesterday and i would suspect we will have growing speculation in the next few weeks in this stock as the market weighs the possibility of the distribution returning and how much will it be. The company has already told us that they are headed in that direction.

Futures have weakened a bit ahead of the open.

MLPS SET TO BREAK BELOW SUPPORT!

Look closely at the MLP chart above and the dow jones industrials below and you can see something quite revealing in terms of who is leading who. Notice the mlp index topped out at the end of February as the dow continued to rally into its top in late March. So mlps sounded the alarm that the rally was about to end and now we are at a new inflection point for mlps. The index is about to break below last week's low which means the 200 day moving average at 380 will be critical for longer term prospects.

The dow industrials meanwhile is only now coming into its support zones but if we believe in the leading ability of mlps which has been the case since late 2008, then this correction has only just begun.

News this morning from Plains All American (PAA) which is upping its distribution to 1.04 which is about a 2% increase and makes 30 of the last 32 quarters that we have seen a distribution increase. The stock is off its recent highs in the low 80s. Penn Virginia Resources (PVR) is buying a pipeline for a billion bucks. The stock is off from its recent highs in the upper 20s thanks to the selloff in any mlp that has its hands in coal. Speaking of which Alliance Resource Partners (ARLP) has made a quick trip from 80 to 50 and sits at 52 this morning. No sign yet if the selling here is done and a break below 50 is a sure signal from the markets that the distribution may be in trouble.

Stock futures this morning are trying to hold as problems swirl in Europe. Crude is looking to break below 100 bucks so we will watch that level carefully. Nat gas is down and 2 dollars continues to lie just below current levels. Bonds are looking to challenge 2% again with a flight to quality.

UGLY UGLY UGLY!!!

Alliance Resource Partners (ARLP) continues its rapid selloff down another 5 and change today and is sitting just above 50 bucks. Seeking Alpha has a piece today suggesting coal may be a good contrarian play here but in the piece the writer says he expects distributions to be "down" so apparently the writer doesn't understand that the prospect of a distribution cut in a master limited partnership is not something one buys into.

The mlp index is down over 4 points as the market has cut its losses in half; the dow is down 88 points as of this post. Nat gas is sitting just above 2 dollars but it is now up on the day.

WILLIAMS DEALS AND SELLS!

Some corporate action this morning as we have Williams Partners (WPZ) down 2 dollars in the pre market as the company announced a deal two weeks ago to buy Caiman Eastern Midstream LLC so it is selling 9 million units to finance it. The stock has now pulled back from 60 bucks in the recent mlp pullback. Also in the news this morning is Atlas Pipeline Partners (APL) is buying an interest in Mississippi Lime which is apparently oil rich. And Plains All American (PAA) is announcing earnings will exceed the midpoint of its guidance which is never a bad thing unless the market has already figured this out.

Markets this morning are lower ahead of the open with the dow trading down 100 points as Europe is weak this morning. Gold is down nearly 50 bucks this morning as the dollar rallies. Crude and nat gas are both down so we are set up for weakness today. Its probably not unexpected as we settle into the second quarter. Even Apple is down 5 dollars this morning. So at least for the start we will be taking a little gas here.

NEW QUARTER MEANS CHOOSING WISELY!

The first quarter is over and done with and we have seen some great moves in the overall market led by the nasdaq which jumped 18% in q1! MLPS however lagged far behind for the first time in a long time. While the index did hit 410 which is a new high it closed the quarter virtually unchanged. Building tops are a process while bottoms are usually events. And right now it seems that mlps as a group will take a back seat to the rest of the market.

The big movers down over the last few weeks have been the coal mlps which were hit hard by an EPA ruling which will make it harder to start up new coal plants.
Alliance Resource Partners (ARLP) was one of the groups star performers for a long time but after hitting the lower 80s it has sunk below 60 and alot of that came last week with an end of quarter blow out. The stock is down 1 to 57 this morning and this chart has stay away written all over it at least for now. Some are even questioning whether the company can grow its distributions under this regulatory enviornment of this administration.
Natural Resource Partners (NRP) above and Penn Virginia Resources (PVR) below are 2 others that are suffering with the coal group. For now there is no indication of distribution trouble but quarterly reports will be due out in the next few weeks so it will be interesting to see if companies have anything to say about it and what, if any impact this will have down the road. Remember folks its about growing payouts. For now im staying away from the coal mlps until the situation becomes clearer or at least a bit less muddied.


This morning the index is up a fraction and holding above 390. Overall the market is down a little today after the buy rush from the last few days. Nat gas has even stopped going down for now as 2 dollars appears to be holding. The 10 year is at 2.16% and crude is near the top of its recent range on Brent at 125 but West Texas is near 104.