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.