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Saturday, September 29, 2007

Interesting piece from WSJ-online about the increasing risk of upcoming MLP ipo's. Worth a read. Also news this weekend that Devon Energy will be delaying its ipo of an MLP comprised of onshore natural gas assets. And here is news on another upcoming MLP ipo. Just a few things going on this weekend.

Friday, September 28, 2007

MLP index is now back to the flat line but at least its following the overall market which is down modestly and not down hard while the market is rallying. Grasping at straws here i understand but what choice do i have?
Have been able to say this much lately but not only are we up but we are at the highs of the day...up .80!

Thursday, September 27, 2007


It began with a run to 342...a nearly 3% gain plus distribution...and then came subprime and everything else and the bottom fell out.

We started the quarter out at 331.76 and as of yesterday's close at 295.71 we are down over 11% for the quarter but at least there was one distribution payout so the total quarter return is more like minus 10%. Also yesterday's close was the second lowest close since the the early august collapse. So needless to say we need to hold in here or the outlook near term is a bit grim. However always the optimist here...we are deeply oversold and a snapback rally could come at anytime. The lowest close was 290.88 on August 16th when we retested the August 6th intraday low of 281.20...on the 16th we got to 281.77 and then rebounded. That was the day the dow turned from 12588 and was followed by the discount rate cut the next morning. I have been talking for days and days about portfoilio blowout pressures and since they come to an end today. We'll know soon enough whether i'm right or not.

We have earnings this morning from Ferrellgas and they are at record levels. Morgan Keegan came out after the close yesterday and started coverage on Markwest Energy (MWE) at an outperform and on Plains All American (PAA); it starts that one at market perform.

Its just ugly out signs of any bottom.
Clawing back from an intraday low of 295.46. Some bids arriving...but i'm not holding my breath.
An insider buy at Teppco. At least someone is hopeful.
The selling just continues led by Energy Transfer Partners (ETP) which is down another dollar and change. Also down nearly dollar is Nustar (NS) so they are leading the MLP index down 2 points at 295.80. It is pretty demoralizing as the rest of the market is nearing new highs and your group is closer to the August lows. Plains All American is up 68 cents which is probably making things a little less worse then they otherwise would be.

About the only hope we have right now is that this is all related to end of quarter...and that comes to an end at 4pm tomorrow.

That overriding question looms large over MLPS as we have watched them continue to sell off while the rest of the market heads toward new highs. In 2 months since the July top we went from an almost zero spread verses the 10 year to spreads over 3 points in some instances. Here are three examples of companies that have already pre-announced distribution increases.

9/27 Q1/08 Annual

EV PARTNERS...........................5.1%..........6.1%..............$2.24

LINN ENERGY...........................7.1%....;.....7.9%..............$2.52


Linn Energy is priced to yield nearly 8%. Last time this happened was when the stock was in the mid 20s before its run to the lower 40s. Not saying necessarily that another big move is coming but you have to believe the downside here is limited by these really large yields and the large yield spreads.

Now whether this is a longer term buy signal depends on many other factors. Take a look at the MLP index back in July of 2005 after the last spike in crude oil to 80 bucks. The index topped at 270 and began a correction which bottomed at the end of Q4 at 238.

Now there are some differences from 2 years ago. First off crude dropped to near 50 from that sign of that happening now. Also Natural gas spiked to 15 dollars and dropped steadily from there. Nat gas may have bottomed at 5 dollars a few weeks ago and is now back to near 7 bucks. So at best Nat gas will be hanging around these levels. Its hard to get clues from the 10 year since it was under 4% in mid 2005 and MLPS rose in the face of a couple of rallies to 5.25%. So there are all kinds of conflicting signals here. Maybe it really all boils down to portfolio blowouts by funds who are abandoning these high yield vehicles and moving into those sexy tech stocks. Still i have to think that you could do worse than picking this area as an entry point for some MLPS that have been sold down quite hard.

No corporate news this morning and no upgrades or downgrades so far.

Wednesday, September 26, 2007

Maybe we need Warren Buffett to announce that he is taking a stake in MLPS....hell he probably can buy them all out in one swoop!
Back over 298 on the MLP index. More bids arriving.

Patient off life support but still in intensive care.
A few bids beginning to show up on a few MLP issues here. The bleeding seems to have stopped but the patient is still on life support.
Bleeding has stopped for now at at 297.50

Rallies are where you find them!

Looks like 290-295 would be the next logical stop. Selling continues almost unrelenting...downtick after downtick. 297 is about to go.
Free fall in the MLP index down over 2 points and just above 298. The index is being dragged by Energy Transfer Partners (ETP) which is down over 1 dollar. Plains All American (PAA), Nustar (NS) and Natural Resource Partners (NRP) are all down major fractions.

Holly Parnters (HEP) Transmontaigne (TLP) and a few others are winners but again most winners are up 50 cents or less.

No sign of a bottom...down nearly 3 points now at 297.74.
Just seems pretty hopeless in here today. Market is up but we're down. The MLP index is down over 1 point and hovering above 299. There is some support that needs to hold around 297.50 otherwise that ledge formation will turn into a diving board. I would hate to think we have to retest that climax low down at 280.

Energy Transfer Partners (ETP) is down 1 point even though they are boosting the distribution. Plains All American (PAA) Teppco (TPP) and EV Partners (EVEP) down major fractions. Smaller fractional losses in Kinder Morgan (KMP) and Enterprise Products (EPD), two of the heavyweights in the mlp index.

Linn Energy(LINE) Calumet (CLMT) and DCP Midstream (DPM) are fractional winners but all under 50 cents.

Its a nice distribution increase for both Energy Transfer Partners (ETP) and Energy Transfer Equity but there was this registration statement filed yesterday as the company is offering 2 billion in securities. Looks like they are out shopping for something. But the market doesn't seem to care so both stocks are lower this morning by fractions.

Meanwhile this morning MLPS opened higher but the index has now turned lower by 2 cents. It remains above the 300 level but barely. It traded down to 299.76 yesterday before closing at 300.40..down over 3 points. I am looking for any clues that the selling pressure is abating but no obvious signs yet. MLPS had a tough time in 2005 when oil last spiked above 80 bucks. I am not sure if there is a connection here. But i guess its just teeth grinding until we can gather some footing.

No other corporate news this morning and no upgrades or downgrades on the list that i could find.

Tuesday, September 25, 2007

Losses accellerating as we broke under 300. Nearing a 4 point loss on the day.

That ledge since August is either a launching pad or a diving board. Bottom is still holding however it looks very fragile. We just broke under 300.
Slow drip the lows of the day down 3.31 on the mlp index. Hardly any mlps above the flat line. The ones that are are up only by pennies at best.
Selling continues in MLPS as it follows the rest of energy. The index is down over 3 points and 300 looms large later this afternoon. The winners list continues to shrink to a precious few and even those like Natural Resource Partners (NRP) and Hiland Holdings (HPGP) for example are just up pennies. Most of the group is down...fractions to one point or so.
Got this emailed to me...thought i'd share

UPDATE 1-RESEARCH ALERT-Goldman cuts GP MLP coverage to neutral
08:46 a.m. 09/25/2007
Provided by
(Adds details)
Sept 25 (Reuters) - Goldman Sachs lowered its rating on general partner master limited partnerships (GP MLPs) to "neutral" from "attractive," saying valuation now appears to more appropriately recognize the leverage general partners have to corresponding MLP's distribution growth.
Goldman raised Magellan Midstream Partners (
MMP) to "buy" from "neutral" and raised Teppco Partners (TPP) to "neutral" from "sell."
The brokerage said it continues to prefer master limited partnerships with visible capital expansion programs and distribution growth profiles.
It downgraded Crosstex Energy (
XTEX) to "neutral" from "buy", Enbridge Energy Management LLC (EEQ) and Enterprise GP Holdings (EPE) to "sell" from "neutral." (Reporting by Sharangdhar Limaye, Neha Pathania in Bangalore)

A lot of the bigger cap MLPS are down major fractions like Plains (PAA) Kinder Morgan (KMP) and Energy Transfer (ETP) and as a result we're seeing the MLP index down 2.68 and under 301. The selling has accellerated in the last hour; this while the overall market has firmed. The energy market is lower with crude oil down 1 and change. Big energy stocks are lower today. So there are substantial headwinds.

Well unlike days when we start higher and finish lower, today at least we have the chance of going the other way and starting lower and finishing higher. The mlp index is down over 1 point. So at least the hope is there. Its a morning of no news and no upgrades or downgrades. Calumet Products Partners (CLMT) leads the losers down 1 and change. Down nearly 1 point include Sunoco Logisitics (SXL) and Enbridge (EEP). Fractional losses in EV Partners (EVEP), Oneok LP (OKS) and Enterprise (EPD).

On the winners list there isn't anything outstanding but both Buckeyes (BPL,BGH) are up and there are smaller penny size gains in a few other issues.

Its the last day of trading for the quarter if you want settlement in this quarter. I still think there is a lot of end of quarter selling pressure which should come off soon.

Monday, September 24, 2007

They just can't seem to catch a bid. MLPs at their lows of the day with the index down nearly 2 points. The only upside to this is that the volume on most mlps especially the down ones is low so it could be a case of selling into just a handful of bids. Hoping to catch a bounce in the last 30 minutes but don't hold your breath.
The tape remains very heavy in MLP land. Higher opens continue to be met by a steady stream of sellers that don't seem to want to relent here. The index is down just shy of 1 point after a being up earlier. Regency (RGNC), Buckeye Holdings (BGH) Teekay LNG (TGP) Duke Midstream (DPM) and a few others down strong fractions to nearly 1 point.

Kinder Morgan (KMP) is a small winner is E V Partners (EVEP), Oneok LP (OKS) and Penn Virginia Resources (PVR).

No news drivers today so its just the typical ying and yang with the downside bias.

The quarter ends Friday and of course the last day for in quarter settlement is tomorrow. I have commented recently on how the MLP "tape" seems to be heavy with selling pressure and the appearence of headwind supply. Since the group has been a chronic underperformer since the July top of 340 it would make some sense to me that impatient portfolio managers may be blowing out MLPS from their portfolios. Remember that this might not have been true a few years ago but this group has been "discovered" by a lot of people including Japanese housewives doing yen carry trades instead of playing canasta. So look for opportunities here where MLPS are being thrown out at bargain prices. Also the recent moves of crude over 80 bucks might be pressuring some MLPS that are perhaps more exposed to commodity price movements. Linn Energy (LINN) is a heavy hedger.

Atlas Pipeline Partners (APL) uses hedges for natural gas which has been all over the place lately...although APL has been steadily trying to make its way back to 50.

Boardwalk Partners (BWP) is another one that just can't seem to get out of its own way. I'm not sure what the problem is over there but if the steady pressure on that one ever comes off it could rally quickly. And btw Linn Energy (LINE) has a going foward yield now of 7.6 percent or nearly 3 points above the 10 year. In the past that yield spread has been a very good place to go long.

Not the most attractive charts in the world but we've seen far worse charts then these.

This morning is news free in the group at least so far and no upgrades or downgrades from the brokerage firms. So without any catylists we'll just follow the trend and see where the open takes us. Stock futures are a little higher but nothing to write home about.

Friday, September 21, 2007

The MLP index is down about 20 ticks in the face of an up market. Tape has a heavy feel to it as selling appears in certain stocks and it comes for no reason. I am really starting to think we've been seen a sort of orderly unwinding of positions by somebody out there. And they seem to take it one company at a time. Oneok (OKS) leads the losers list down about 1 point. Hiland (HLND) Hiland Holdings (HPGP) Teppco (TPP) and Williams (WPZ) are down major fractions.

Winners include Calumet (CLMT) up 1 and change. Penn Virginia Holdings (PVG) and Crosstex (XTXI) are up major fractions.
Btw i meant to mention the fact that we are approaching the end of the quarter. I am wondering whether a few MLPS are getting blown out of portfolios these last couple of weeks and that the pressure may come off late next week. It could be why stocks like Boardwalk Partners (BWP) Global Partners (GLP) Linn Energy (LINE) and a few others just can't seem to get out of their own way. Food for thought.

We have been pretty much moving along with the rest of the market lately.

The MLP index in relative terms were damaged much more than the broader market and as a result the repair job is more extensive. Still we seem to be moving in line with the overall market performance since Tuesday. But we remain below the moving average support lines while the dow industrials are trading back above it.

This morning we have K-Sea (KSP) pricing its offering at 39.50 a share.
Targa Resources (NGLS) gets an upgrade from Wachovia to outperform from market perform. For some reason the Deutche moves on both Buckeyes (BPL,BGH) is on the list again today but that is old news from yesteday.

The open looms large!!

Thursday, September 20, 2007

The mlp index is up a little over 50 cents the highs. K-Sea (KSP) and Hiland Holdings (HPGP) are down 2 points each; K-Sea on the stock offering. No news on Hiland GP though the LP (HLND) is up a fraction. Buckeye Partners (BPL) is up 35 cents on the upgrade by Deutche and Buckeye Holdings (BGH) is down 35 cents on the downgrade by Deutche. Elsewhere Natural Resource Partners (NRP) and Inergy Holdings (NRGP) lead the winners list up 1 point each.

Calumet (CLMT) is down 88 cents and leads the losers list others than the ones mentioned above. Regency(RGNC) and Global Partners (GLP) are losing fractionally.

Looks like a consolidation afternoon after the big gains of the last week or so. It appears to be very orderly in here.

Tonight its the Meadowlands 3rd race where Farleyshelonwheels goes for win number 3 in a starter allowance. Its the 3rd race. We actually nominated him for the Princeton Stakes last week but opted for this softer spot.

Deutche Bank is upgrading Buckeye Partners (BPL) and raising its target price to 59 dollars from 51. At the same time it is downgrading Buckeye Holdings to hold from buy and holding its price target at 28 dollars. Upgrades and downgrades make for one day moves if that.

The LP has underperformed the GP over the last year. In fact Buckeye Holdings has more than doubled since its IPO last year near and traded as low as 15 dollars.

In the news this morning K-Sea Partners (KSP) is doing an offering of 3 million shares. The stock was up nearly 2 yesterday. Stock is offered lower in the pre-market. Not much else happening this morning on the news front.

Natural gas is getting nailed this morning for 25 cents and is down under 6 dollars again. Oil is up near record highs. The 10 year rate is rallying up to 4.60%.

Yesterday the MLP index closed up nearly 2 points which was 1 point off the high of the day. Still we are slowly reparing the damage of last month.

Wednesday, September 19, 2007

Plains All American (PAA) is buying a storage facility from Suburban Propane (SPH).

I guess that ledge on the chart from the action of the last 2 weeks was the formation of a launching pad. The MLP index was up over 1% yesterday...3 plus points on the back of the spectacular post fed rally. We have a few hurdles to get through like those moving averages which are still above us but i think the odds favor us going above those in the next week or so. From top to bottom we've sustained a 20% correction...much deeper than the overall market so it would be expected that we have more work to do here. We're still almost 40 points below our all time high so there is lots of headroom here.

We have news leftover from last night as Transmontaigne (TLP) announces a small purchase of assets. Other than that its quiet on the news front this morning and no upgrades or downgrades so far but this is an early post.

Headlines as they break this morning.

Tuesday, September 18, 2007

Fed cuts funds and discount rate both by are soaring. Dow up 250. The MLP index is now up 3. Losers list has thinned considerably. We have been rescued.
Fed announcment coming up in minutes. MLPS up today. Index is back over 302 and up 1.50. Before the announcment we have Terra Nitrogen (TNH) up 4. Energy Transfer Partners (ETP) has reversed yesterday's reversal and is up over 1. Natural Resource Partners(NRP) is up 1 and change. Alliance Resource (ARLP) and Alliance Holdings (AHGP) up nearly 1 point. Fractional gains in EV Partners (EVEP) Magellan Midstream (MMP) Hiland Holdings (HPGP) Atlas Holdings (AHD) and a few others.

Losers list includes Trans Montaigne (TLP) down 67 cents as the biggest loser. Genesis (GEL) Calumet (CLMT) Copano (CPNO) and Oneok (OKS) showing smaller losses.

Here comes the fed...seatbelts backs and tray tables in the upright and locked positions...laptops and cell phones turned off! (Well not the last 2)
Okay it is. But this morning stock futures are strong as the ppi was very tame and Lehman Brothers earnings indicate the company isn't going out of business. Meanwhile MLPS are coming off an intraday reversal yesterday where they were closed near the lows of the day. Energy Transfer Partners (ETP) was the culprit but none of this was news driven. So we look ahead to another morning where we have no news and no upgrades or downgrades.

And yes its the fed, the fed, the fed. Rick Santelli who btw i think is one of the smartest people cnbc has on the air points out this morning that we have 81 dollar oil and we're talking about a fed rate cut. Did we ever think we'd live to see the day that would happen. I'm betting on a cut of 25 on the fed funds, a cut of 50 on the discount rate, and friendly language. MLPS meanwhile are stretched near the bottom of their valuation levels with spreads over 3 points over treasury in some cases. So unless the fed surprises we are seeing nice cheap entry points here for the long term.

In the energy complex Crude is flat. Nat gas has turned a little lower this morning as it corrects its big move of the last week

Monday, September 17, 2007

We reversed and closed near the lows of the day. Energy Transfer Partners (ETP) at one point today was up nearly 2 dollars to 53.94 and then the bottom fell out and the stock closed down 60 cents just above 51. No news drivers that i could find. MLPS pretty much closed near their lows of the day. Hiland GP (HPGP) was down over 2 dollars; no news. Williams Partners (WPZ) was down nearly 1 dollar and closed just above 40. Natural Resource Partners (NRP) and Alliance Resource (ARLP) were both down 1.

Monitoring for after hours news items.
Up a buck 35 on the MLP index while the dow is down 40 points at this posting. Since we have all these predictions of recession it is worth noting that the last period of declining growth (2000-2002) saw the MLP index rise from 100 to 182 in that 2 year period. Of course there are many more MLPS trading today so the question becomes whether MLPS will be the defensive magnet that draws money in a recessionary enviornment? Food for thought here.

Energy Transfer (ETP), Transmontaigne (TLP) and Exterran Partners (EXLP) are up 1 point or more. Nustar (NS) Holly Partners (HEP) Duke Midstream (DPM) and Calumet (CLMT) are strong fractional winners.

Down major fractions to 1 point include K-Sea (KSP) Williams (WPZ) Hiland Holdings (HPGP) and Terra Nitrogen (TNH). Buckeye Holdings (BGH) Linn Energy (LINE) and others down fractions.

The silence is deafening this morning in MLP land as we have no corporate developements at upgrades or downgrades...nada...nulla...naught...nothing. So its the market and the fed as we head into Tuesday's meeting. This morning stock futures are weak but off their lows. The energy complex is weaker except for natural gas which is higher by 15 cents. So there really isn't much to trade on. Friday's action was okay. We built on strength and closed near the high for the day and closing above 300. So we'll sit back and wade through the open and see where it takes us.

I posted over the weekend my fed prediction and invite you to leave yours. I am astounded by all the pessimism that seems to be building into whatever the fed does....which leaves me a little more bullish about the whole thing. I think he cuts by 25..leaves the door open for more cuts as data provides in the statement language... and cuts the discount rate by at least 50 basis points...all in my never to be humble opinion.

Saturday, September 15, 2007


Since everybody else on earth has a prediction on the fed and the markets here is mine.

The fed cuts by 25 basis points....

The fed language says the door is wide open for further cuts.

The fed cuts the discount rate another 50 basis and possibly 75 to help the credit markets.

The market probably doesn't do much on Tuesday going back and forth after the news...and then rallies on Wednesday.

Feel free to comment on your predictions.

Friday, September 14, 2007

Its either a lauching pad or a diving board. Still up nearly 2 points today which is nice to see in a flat overall market.
MLP index is up 2 points now and continuing to slowly gain strength. Energy Transfer (ETP), Nustar Holdings (NSH), Enterprise (EPD), Buckeye Holdings (BGH) Martin Midstream (MMLP) are all up strong fractions. Terra Nitrogen (TNH) and Buckeye Partners (BPL) up 1 point or more.

Oneok LP (OKS) AND Spectra Partners (SEP) are the biggest losers down 50 cents apiece. Oneok LP (OKS) is suffering from guilt by association as Oneok (OKE) scaled back short term guidance due to cooler than normal weather and the stock is down 1 and change. Last night some bozo sold Oneok LP in the after market 2 points under yesterday's close. So one bozo sold the wrong stock and one lucky soul get some extra cheap shares. It pays to pay attention.
MLP index is up 2 points now and continuing to slowly gain strength. Energy Transfer (ETP), Nustar Holdings (NSH), Enterprise (EPD), Buckeye Holdings (BGH) Martin Midstream (MMLP) are all up strong fractions. Terra Nitrogen (TNH) and Buckeye Partners (BPL) up 1 point or more.

Oneok LP (OKS) AND Spectra Partners (SEP) are the biggest losers down 50 cents apiece. Oneok LP (OKS) is suffering from guilt by association as Oneok (OKE) scaled back short term guidance due to cooler than normal weather and the stock is down 1 and change. Last night some bozo sold Oneok LP in the after market 2 points under yesterday's close. So one bozo sold the wrong stock and one lucky soul get some extra cheap shares. It pays to pay attention.
Here is the link to the CNBC interview with Joseph Keating. Worth a look.

Okay we are getting attention! CNBC at 9:40am had an interview on with an anal-ist on dividend stocks and they spent a lot of time on MLPS. Cramer joined into the act and it pretty much became a cheering endorsement for the entire group. There was a good explaination of the yen carry trade and how many hedge funds were using it in conjunction with MLPS. They screamed how undervalued the group is...etc etc etc. The link is above but be advised that the CNBC web site has been having some issues this morning.

We opened lower with the market but then buyers arrived and the index is up 1.43 and over 300. In fact it has been adding to gains since the open. Lots of fractional winners this morning. Breitburn (BBEP) got 2 upgrades this morning from Wachovia which went to outperform and AG Edwards which went to buy from hold. Stock is up a fraction and over 33. Losers confined to yesterday's bigger winners like Penn Virginia Holdings (PVG) and Natural Resource Partners (NRP). Natural Gas is up sharply so that 5.21 bottom from Monday makes a triple bottom and i think we've seen the lows there. Oil straddling 80 with some profit taking. The dow opened down but has rallied back to almost dead even.

Thursday, September 13, 2007

Stronger overall market on thin volume. MLPS are fractionally higher on the index; up over half a point and just under 300. Natural Resource (NRP)Penn Virginia Holdings (PVG) and Sunoco Logisitics (SXL) are up 1 point or more. Alliance Resource (ARLP) Alliance Holdings (AHGP) Calumet (CLMT) Energy Transfer (ETP) Atlas Holdings (AHD) are all fractional winners.

Both Crosstex's (XTEX,XTXI) are fractionally lower although XTXI was the one that Goldman downgraded. Energy Transfer Equity (ETE) Nustar (NS) Oneok LP (OKS) are fractionally lower. Oneok is down despite a UBS upgrade. Duke Midstream (DPM) and Boardwalk Partners (BWP) are down small fractions. Boardwalk lately can't get out of its own way. Any rally is met almost immediately with sellers.

Volume light today given the Jewish Holiday of Rosh Hashannah.
Goldman Sachs is downgrading Crosstex (XTXI) cut to neutral from buy at Goldman Sachs. Also i want to point out that UBS has a pretty good record on it upgrades and downgrades. They tend to time things fairly well over there so the upgrades may have some impact. And Teppco and Oneok both have heavy weights in the MLP index.

UBS is sounding the trumpets this morning and upgrading 2 of the bigger cap MLPS...Oneok LP (OKS) and Teppco (TPP) to buy from hold. The charts below tell us that of the 2 Oneok (OKS) has been the better performer. In fact the weekly chart of Oneok still looks pretty good with the longer term uptrend in tact.

The daily chart is trailing the MLP index pretty well which does not look that good lately.

Meanwhile Teppco has been prett much going sideways for the last couple of years since they have hardly raised its distribution in the last couple of years. So it trades more like a bond really than anything else.

Meanwhile yesterday Breitburn announces a nice deal and pre-announces a hefty distribution increase and the stock prices does nothing. It joins E V Partners (EVEP), Copano (CPNO) Linn Energy (LINN) among others who have pre-announced distribution increases for the next few quarters and the stocks are selling at much lower prices then they have been for quite awhile. Shows you what happens when your group goes from being in favor to being out of favor. Another measure of disfavor could be seen yesterday with Encore Partners (ENP) which started trading yesterday. It priced mid range at 21 (offered 20-22)..opened at 21 and closed 10 cents above that.

This morning we have no corporate headlines. Crude oil is at 79.89 this morning as 80 dollars looms large after trading above that yesterday. Natural gas is down this morning after a 3 day big rally of a buck and a half. Stock futures are higher this morning and the 10 year is resting around 4.40%.

Yesterday the MLP index managed a small up close for the first time in 5 sessions. One poster questioned whether hedge funds have anything to do with this arguing that the group is too small for hedge funds to bother with MLPS. I would point out that at least one hedge fund that blew up in early August and remember when you are illiquid to begin with and someone is selling something because they have to and not because they want to, you see larger than normal volume and 4-6 point down spikes. Remember August 6th folks as our crash day and we've been recovering from that day ever since. I still maintain that we're seeing a more orderly liquidation being orchestrated here by other hedge funds that continue to unwind their positions. The good news in my view is that this is coming to an end in the next few weeks and has offered us many long term bargains.

Wednesday, September 12, 2007

Pretty much flat and moving sideways on the MLP index which is nice to see; instead of the steady stream of selling over the last 4 days. A few upticks in some of the ones that have been beaten down like Williams Partners (WPZ) which is down from 49 to 41. Its up 62 cents and is the biggest gainer today. Suburban Propane (SPH) Calumet Products (CLMT) Holly Partners (HEP) and a few others up fractions.

Losers include Alliance Resource Holdings (AHGP), Duke Midstream (DPM) Oneok LP (OKS) and Energy Transfer Equity (ETE) among others.

Watching the paint dry...
IPO today of Encore Energy Partners (ENP) which priced last night at 21 per share. Here are a list of news links (Hat tip to Bruce for the heads up). Also we have coverage started on Semgroup Energy (SGLP) at outperform by the boys and girls at Wachovia.


And so it goes in MLP land. I continue to believe that hedge funds have been selling in here and i would expect this to continue through the rest of the month with any rallies met by selling. If this plays out however we could put in a meaningful bottom in here and set up for a nice rally for the forth quarter. However we are still at the mercy of the overall market and if the market breaks down after next Tuesday's fed decision we could see that 280 low of August get taken out and then we go back down to last years breakout point at 270. I would think that is a low risk proposition of occuring.
We have a deal this morning as Breitburn announces it is buying assets and recommending a big boost in the distribution. This should be a stock price mover. Nice to see another deal being done in here. No upgrades or downgrades so far this morning and no other headlines so far. Natural gas has gone above 6 dollars this morning. I'm not sure whether this has to do with tropical developements. There are potential systems out there but nothing pending short term. Looks like the bottom in the low 5's is in. Crude is flat to a little higher this morning. The 10 year is at 4.35% and stock futures start the day a little weaker.

Tuesday, September 11, 2007

MLPS have been left behind in this rally today. I still suspect some orderly unwinding of positions is going on from some hedge fund. The index dropped to 299.30 but is now back over 300. Williams (WPZ) is the biggest loser down 89 cents and there is a long list of big cap losers of major fractions.

Hiland GP was down to 29 and has now reversed and is up 1. Natural Resource (NRP) is up nearly 1 point. Penn Virginia Holdings (PVG) Martin Midstream (MMLP) among others are fractional winners.

Last hour coming up. Dow adding to gains. Lets see if the index can close up by days end.

It was my theory yesterday that somebody (read hedge fund) was unwinding yesterday as the index was weak all day long until about 2:30 when some nibbling began. Also most of the losses were concentrated in the bigger caps in the index like Oneok (OKS) for example. I can't prove it but it just had that feel. Still 300 held and now we need to get back to 307.25 to get above the 200 day moving average.

Chart would suggest lower prices in the short term but the overall market which remains schizophrenic is dictating the pace.

So far this morning its quiet on the corporate news front and there are no upgrades or downgrades so far. The energy complex is flat this morning except for natural gas which had a whopping 8% gain yesteday and is adding a few pennies this morning as it sits just under 6 bucks. That was a huge reversal from yesterday's early morning loss of 25 cents to a gain of 49 cents by days end. You can hear the shorts screaming in agony. The 10 year is sitting at 4.33% this morning. Remember that 5 handle??? Long gone now. But at least the risk premium is back into MLPS with spreads of 2 to 3 points over the 10 year in yield. So at least we can argue that these stock prices are at no worse than fair value. And insiders continue to do some shopping. Check out the action in Crosstex Energy (XTEX) as an example.

Monday, September 10, 2007

There is the feeling that something is getting unwound in MLP land as MLPS are down along with almost everything energy. Still off 4 points and straddling 300 on the index while the dow has come off its low and is essentially flat. Broad tape is still rather weak. Inergy Holdings (NRGP) Energy Transfer (ETP), Holly Partners (HEP) Linn Energy (LINE) and Sunoco Logistics (SXL) all down 1 point or more. Plains All American (PAA) and Oneok (OKS) down nearly 1 point each. Lots of losers with most losses showing major fractions.

Still not many winners...Calumet (CLMT) Buckeye Holdings (BGH) and the Markwest pair (MWE,MWP) are up but not by much.
The overall market is very weak being masked by selective strength in a few dow stocks. MLPS are weak...the index is down over 2 points and may make a challenge to the 300 level today the way things are going. The big mlps like Oneok (OKS) for example is down over 1 point. Most MLPS are down strong fractions. Not a whole lot in the win department with Markwest (MWE) up on an Wachovia upgrade and Markwest Hydrocarbon (MWP) up as it gets closer to its buyout price.

This does not look to be a pleasant day as the market has that falling in a sinkhole feeling. Looks like we need to go back under 13K to re-test the lows at the very least.

After Friday's sell off we start the new week at 303.66 on the MLP index. We are about 4 points below the 200 day moving average. Chart has a distinctly bearish look to it and we need to hold above 280-285 if we trade down that low. On the otherhand last years breakout took place in late September

Judging from the action lately we have some base building work to do.

This morning its very quiet out there. No upgrades or downgrades showing up and no corporate headlines. Natural gas sold down again to 5.25 only to see it bounce this morning to 5.45...down only a nickle. No tropical action driving the complex. Oil lower by 89 cents this morning. Stock futures are higher.

Friday, September 07, 2007

Some of the financial stocks have turned higher here like Goldman Sachs and Citigroup. They were the first to turn when the market bottomed at 12588 in August. The MLP index dropped to 302.79 and is back over 303.10 as of this post. We'll see if this attempt to stop the bleeding holds. A few more MLPS have turned higher like Inergy Holdings (NRGP) Natural Resource Partners (NRP) and Genesis (GEL).
Dow falling down nearly 240...the mlp index down near 3 points. Maybe its just me but it doesn't feel that bad. But the fact is almost every stock in the group is down. Exceptions are Exterran Partners (EXLP) which is up a fraction but its thinly traded. Also Copano (CPNO) Cheniere (CQP) and Teekay Shipping Partners (TGP) are tiny fractions. Calumet (CLMT) has just turned up a few cents as i post.

Terra Nitrogen (TNH) is down 5. One point minus signs in Energy Transfer Partners as it announces another purchase of assets. Legacy Reserves (LGCY) is also down over a point. Lots of fractional losses in just about everything else.

13,100 is holding so far but who knows what happens after lunch.

That's the way it looks on this chart which is not of my making. So much focus is on the jobs number this morning which makes it sort of anti-climatic. Still it will be a mover. MLPs are looking at a 10 year under 4.50% which i think limits downside now that risk has been priced back in on the spreads. My own view on the MLP index is that the group made its bottom in August and we are base building.

Of course a retrest of the lows isn't out of the question if the overall market tanks or if another hedge fund unravels. Right now though i am siding on optimism.

This morning is quiet as most Friday's are in the group. No corporate headlines and no upgrades or downgrades so far. No headlines leftover from last night.

Meanwhile there is the always exciting Terra Nitrogen (TNH) which hit 122 yesterday..up from the August low of 66. Its been an almost straight up move.

We saw a reversal yesterday and a lower close. Nothing tragic here and certainly overdue. This chart was posted on the yahoo message board for TNH and the poster sees 105 as an entry point. There is also a small gap on the chart leftover from last week between 99 and 100 and i would not rule out a trip down to that level. Moving average support is just below that.

I am not recommending anyone trade this btw. It is definitely not for the faint of heart. It is fun to watch a stock with an extremely thin float of less than 5 million shares turnover that volume on an almost weekly basis!

Thursday, September 06, 2007


Markwest Hydrocarbon shareholders are dancing in the streets this morning with a 10 dollar gain in the cards as Markwest Energy LP (MWE) is paying $61.12 per share in cash...or if you so choose cash and stock, for Markwest Hydrocarbon (MWP). There have been occasional rumours about this over the last few months. Stock closed in the 50 area yesterday. No trades yet in the pre-market. Also yesterday Magellan Holdings (MGG) priced a large offering of shares. Stock is down 1.29 in the pre-market.

We had a pretty good day considering the overall markets drop of 140 on the dow. The mlp index closed up 20 ticks and at the high for the day. About half the list was down and half up. The energy complex is higher this morning across the board. Stock futures were higher overnight until 6am this morning when China'S central bank raised reserve requirments. Futures went from +2 to -5. Then some good Walmart numbers and the futures are now just -2.
No other corporate headlines this morning and no upgrades or downgrades.

Headlines as they break.

Wednesday, September 05, 2007

DOW down 124...MLP index now unchanged.
The MLP index is down just 13 ticks here...almost even on the day.
Now that the 10 year is under 4.50% i think we are at a point where yields are low enough on bonds and high enough on mlps that unless the market completely unravels, mlps will be able to hold up well. The index is down fractionally with the dow nearly off 200 points here. There are a number of mlps that are higher today including Inergy Holdings which is up 2. Duke Midstream (DPM) Boardwalk (BWP) Eagle Rock (EROC) Penn Virginia Holdings (PVG) and Legacy (LGCY)

Markwest Hydrocarbon (MWP) is down 1 and change. Buckeye Holdings (BGH), Oneok (OKS) Atlas Pipeline (APL) E V Partners (EVE) among others down fractionally.

Got my eyes wide open here but i have a feeling we could bottom during lunchtime and rally back later this afternoon.

Its only by a few ticks but we are sitting just above the 200 day moving average for the first time in a few weeks. The chart looks like it is trying to bottom in here. Of course we are still getting whipped around by the overall market which is starting weaker this morning. But i like weak opens and this could be some profit taking after the strength over the last few days.

Its not the prettiest chart but it is trying to mend itself.

Meanwhile this morning we have slightly higher energy prices..even natural gas is up 3 cents. Not much corporate news. Inergy and Inergy Holdings (NRGY,NRGP) are buying a storage facility in upstate NY. Nice to see those deals yesterday but i am stumped as to why Copano (CPNO) could not get a couple of points of upside on its gas deal and a 22% distribution increase. The purchase is being funded with a private placement so there is no dilution coming from a stock offering. I went long at 40 bucks. Anyone have any ideas on this please share them in the comments section.

Meanwhile Terra Nitrogen (TNH) fans have enjoyed quite a ride. From 66 just a few weeks ago we closed yesterday above 115...still off the 140 high. I sold my trading position out last Friday in the low 100s after going long at 84....made some nice money.

Chart looks like it wants to go higher but this trades violently and could be up or down 10 points at anytime. There is a small gap leftover from last week down around 99-100. If it drops down there quick i'll take a small position but for now i am sitting at the sideline bar and grill and having a beer. Definitely not for the faint of heart.

Tuesday, September 04, 2007

I was biking this morning and saw this sign. I just couldn't resist.

Two other deals...smaller ones announced today. Legacy Reserves makes a purchase that has the stock up over 1 dollar while Atlas Energy Resources (ATN) announces a smaller purchase. Nice to see deals getting done.

Meanwhile Copano (CPNO) up only about 1 buck on its 600 million dollar purchase this morning. I thought there would be more bang for this but who knows these days. Picked up some shares this morning around 40 bucks.

MLPS are acting well today. The index is up 2 1/2 points and back near the 200 day moving average on the chart. Lots of nice gains as some of Friday's non gainers play catch up and some of Friday's winners take a breather for now.

Stock Market Technical Analysis 8/31/07

Brian does a good job on the overall market view based on the charts. Sharing this with you. Its worth a view.

Stock Trading Ideas for Tuesday 9/4/07


Haven't had one of these deals since early July and this one is a nice one for Copano holders. The company is making a big purchase and it is going to ask the board to take the distribution to 53.5 cents a share or a 9 cent increase (22%) beginning this quarter.

The chart shows Copano has held up fairly well during all this August turmoil. The company also sees the distribution going to 3 bucks annual by 2010. Now that is 2+ years from now but at 3 bucks annual works out to at least 2 cent quarterly increases for the next 10 quarters. A 6% yield gives you a $50 price...a 5% yield which is still above its current yield of 4.5% gives you a $60 target by 2010. Meanwhile going to .535 gives you $2.14 annual and at its current yield gives you a $47 price. Which ever way you look at it Copano (CPNO) should be up sharply today.

This news is leftover from Friday. Plains All American (PAA) has filed for an IPO of its GP. This will be one to watch when it happens since these guys seem to do things right quarter after quarter.

Meanwhile another hurricane does not go into the Gulf of Mexico as Felix takes a track even further south than Dean did

Natural gas this morning is taking gas down 21 cents to 5.25. Give me a 4 handle and i might go long the Natural Gas ETF (UNG) for a trade only. Until then i will be watching for any sign of a short term bottom. Again this would be only for a trade. Crude Oil is flat to a little higher this morning. 10 year rates are at 4.52% and stock futures are just a touch weaker but nothing tragic. Nothing on the upgrade downgrade list so far.