MLPS HOLDING BUT DOUBTS  CONTINUE



The overall market seems to be holding its own in stair step fashion since the June bottom on the dow near 12,100. Since then we have been in a back and forth battle which continues to be resovled with higher highs and higher lows. The movinging averages have been crossing back to a positive mode. MLPS meanwhile  behaved much better in this correction overall as they came down to 350 on the index and held. And they subsequently rallied back to 400 before hitting a wall. It is important to watch mlps from the standpoint of the overall market. They have been the leaders in both directions, topping first before the rest of the tape and bottoming first before everyone else. The wall that was hit at 400 is probably a good indicator that we could see the overall market rally from 12100 stall before too long.

MLPS have used the recent fall in long term rates as a good tailwind. But I continue to wonder (out loud) how much longer can the fed and falling 10 year rates support the overall market. Europe continues to kick its can down the road. They talk a good game but have really done nothing substantial as the crisis there deepens. Its hard to get optimistic about the economy here with under 2% growth. So the summer markets continue to trade along and mlps now will be sending their payouts to their unit holders. Lets see what happens as the ex distribution cycle plays itself out.

While all this has been happening natural gas has rallied nicely and seems to have decisively taken back the 3 dollar level.It is no conincidence that nat gas and the dollar have been moving strongly together since we are the big cheese as far as nat gas is concerned and suddenly having an energy commodity priced in dollars is a good thing. Nat gas mlps have been doing fine in this rally as price pressures ease so at least that tailwind has now been minimized. Some traders seem to think the bear market there will resume but the chart may be saying that the long term bottom at $1.96 might be it.

Markets are a little higher today as the fed is at center stage. Not sure if anything they say will really mean much since it all seems to be priced in. Jobs numbers come Friday.