BURN OUT!

 I've gotten a few emails asking about me...Many Thanks....im around but just severely burned out. Its hard to write a blog almost every day for 8 years and not go bonkers. It even took me this long to put up this post. I think i will be back day after labor day...assuming my brain continues to recover from being fried.

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.

THE MLP RALLY STALLS!

It was a wonderful run for mlps that took the index from 360 to 400 in short order and an upswing of 16 out of 17 days. But 400 has been a wall again and the chart does have the look of a triple top in the making. However notice that I linked these 3 charts as they continue to drive trading so far this summer.

First off MLPS have run higher since the last days of Q4 and I believe it is part of this massive pile on into anything that has attractive yield. Notice also while all this has been happening the Dow Industrials and for that matter all the broader averages have been essentially moving along a trend line which btw is bordered on the bottom by the 200 day moving average (not shown). And all this is going on in the face of the 10 year which broke below its April low of 1.46 and took a trip down to 1.36%, The bond market is clearly screaming deflation and markets may be starting to take notice. MLPS probably were able to sustain this tailwind but it is very disturbing to see all these downside divergences on the tape. Even some defensive stocks are beginning to show some wear. The selling in the last 2 days is probably overdue but we are about a week away from the quarterly ex distribution process. I wonder who is going to be left to buy once that process works its course. Its another 3 months until the next payout.

Sorry for the scant posts lately but work has been heavy with lots of overtime and its hard to sit in front of computer screen and write this blog while you spend 55 to 60 hrs a week in front of another computer screen. See my latest post on Equities.com btw where I've been posting weekly.

TWO CHARTS LINKED TOGETHER! 

In case you have been just way to busy trying to stay cool in a pool, ocean, or endless beer, mlps have staged a pretty remarkable rally here which began just before the end of the second quarter. We are up 12 of the last 13 days and there is no sign that anyone want to sell in here, particularly since the quarterly results will becoming out soon and most mlps will step foward and announce their usually 2% quarter to quarter increases in payouts. Since we live in a world where dividends and distribtuions are everything, getting 6% cash against a 10 year under 1.50% certainly looks and feels pretty good. Just exactly what the implications are longer term in my view can't be good. But it seems that as bearish as i have been lately, the overall market has just managed to pull back just enough to make you nervous but not enough to make u panic.

Earnings from the big boys, Kinder Morgan Partners (KMP) and Enterprise Products (EPD) will be out soon and those stocks are near 52 week highs. Certainly its a vote of confidence to see these mlps rallying back and the index is nearing 400 again. At least for now buyers are in control.

    MLPS SHOOTING FOR 10 IN A ROW!


Up again yesterday and up again this morning but the overall tape has turned lower as Europe and Italy are hitting headlines about tapping aid. The dow is up 10 points after being up 90 and down 30. MLPS are up nearly 2 points on the index and 390 is getting close. The 10 year is at 1.51% and is not far from its all time lows in yield. Right now (or at least since i disappeared for 10 days) mlps are moving counter to the tape. Natgas coming back to 3 bucks is probably also giving support.

Watch the tape to see what happens this afternoon.

BACK FROM VACATION..UP 8 IN A ROW!

I guess is should stay away more often! MLPS have staged a nice rally. They have cleared their declining moving averages and are up 8 straight days. The markets seem to be keyed on that 10 year rate which is now back down close to its all time low of 1.45% It is trading at 1.51% right now. Spreads remain stubboringly high at around 500 basis points but i guess the market is okay with mlps at these levels, providied the rest of the market does begin a serious circling of the drain.

And while i was away natural gas has been rallying smartly as well and traded above 3 dollars for the first time since January. When it it 3.06 on Friday sellers came in and took it down to 2.79. Nat gas is up today so this rally probably has more upside to it. Perhaps we may be getting into a new rage of 2.50-3.00 in nat gas which at least means that a floor in prices could be in.

 Still this chart has the looks of a longer term complex bottom in nat gas prices and i think the level to watch is still 3.00. A close above this with volume could mean a longer term bottom is in place.

MLPS right now are flat on the day with the dow down about 60 points. Markets seem to be a little softer but with not much conviction. The euro is rallying which is letting crude climb above 85 bucks although energy stocks dont seem to be following suit.

NATGAS BOTTOM? MARKETS ON EDGE!

Heading for a long vacation for all of 4th of July Week so posting will be minimal the next 10 days. Its been pretty minimal as it as lately as work schedules and family issues have been a bit overwhelming. So let me get to a few issues here going on.

Nat gas is staging a rally off what appears to be a significant bottom back in late April. What is very important is that we have broken out above 2.75 so we may be headed back to 3 bucks which for years was the old line in the sand. At least it appears that the nat gas market may try and get above that. Meanwhile take a look at the nat gas mlp etf and notice that this bottom in price has not rallied these stocks. In fact the reverse is true. This is something we need to pay attention to. Something else is going on here and it could be that maybe these companies have so reflexively hedged themselves for falling nat gas prices for years that maybe they are going to get caught short at least at this particular turning point. I guess we might get some idea on this come late July when earnings come out.

Meanwhile the dow and MLP chart are not inspiring. The mlp index seems to be getting ready for another trip down to 350 And the dow chart is moving in tandem.

These are not inspiring charts and i think the summer could bring us turmoil as Europe unravels. But its end of month, end of quarter, and end of half year and at least for the next few days we could see the usually nonsense of money getting moved around from A to B and then back to A.

 

Frankly its hard to see how markets can rally when you have a bond chart that looks like this. Those looking for a hopeful summer might be better off looking for it at the shore.