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Friday, June 08, 2012


The bounce has occured and it has been a fairly nice and predictable 5% rise for the mlp index from 350 to 365. Looking at this chart with the downtrend its going to take a move above those declining moving averages to get me excited here. The rally was going to happen and if the selling resumes and begins to accelerate again it means probably another trip down to the 350 level. That will happen if Europe begins to unravel in a big way. They seem to be walking along the edge of the cliff every day. My question is if the unraveling really happens, what is it going to look like? And what exactly sets it off. Do we wake up one morning with futures down 1000 points? We certainly hope not. I just wonder what the actual event will be that could set the market spiral ala lehman in motion.

No news for mlps this morning and no upgrades or downgrades. A couple of observations. Crude is down 2 bucks this morning to 82 dollars. If the rally of the last few days were meaningful i think you would have seen oil back at least into the 90s. Crude did not move in this bounce. Nat gas rallied to 2.50 and now it looks like we may be headed for another test of the 2.00 level. Is Crude signalling real trouble in the economy? The ten year is under 1.60% this morning so i guess we try for 1.50% again. Barrons calls this the opposite of irrational exhuberance as irrational despair and thats what the bonds are telling us. And here is my prediction for tomorrow...I'll Have Another wins the triple crown. He continues to improve and all of the other shooters have problems of one sort or another that puts them one or 2 levels below the class of  the Derby and Preakness winner.

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