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Monday, December 15, 2008


Friday's action on many charts produced Doji hammer formations for you candlestick lovers which is a bullish developement and I continue to hold the view that we can rally here for awhile. We're certainly entitled a contra-trend rally that could last at least into January.

The first lines of resistence lie just overhead but i'm expecting us to slowly crawl and chew through moving averages. Oddly its MLPs that seem to have the widest base on the charts and that is reflecting the continued pressure being applied by credit markets. Junk yields have not rallied yet and i think we are going to have a rally in conjunction with a rally in high yield corporates. Now if the day comes where these things rally big...look for mlps to rally big as well. 20 percent or greater yields remain common place in here. Even some of the safest mlps are yielding 10% or more. So watch those corporate yields carefully because that will be a tip off for us. I would suggest that year end pressures will continue to push treasuries to ridiculous yields but once those pressues disappear; could we be setting up for the next bubble to burst? If so then TBT which is the double short 20 year treasuries will be a good place to be. They will go up in value if yields go up at a 2 times leverage.

On the news front this morning there are no individual corporate headlines. No upgrades or downgrades on the list either. Crude is rallying up over 2 dollars and natural gas is moving higher buy 15 cents. S&P futures are above fair value and energy stocks are up in the premarket. So with energy up look for MLPS to move up this morning with energy stocks as a whole. We continue to see mlps with possible distribution issues continue to languish. Many of those in the land of single digits. As noted last week with DCP Midstream...if you can show that your distirbution is safe going into next year, your stock price can double very fast. So the game in the next few weeks is figuring out which mlps have safe distirbutions. If you can find one you could get a great return in a very short amount of time. But remember there is risk in here!

Finally this morning...we are getting very close to Christmas and Hanukkah and if you are struggling for coming up with last minute ideas...we recommend Mystic Monk Coffee...or maybe your favorite wine which you can order from the Cellars Wine Club...and then sunggle into a Nuddle blanket...or maybe for your honey to snuggle in the blanket while you drink the wine! Or any other combination you can come up with! All those links are right there on the side bar for your shopping convienence. Or books and things at Amazon! Those links lie above this post...also at your shopping convienence. So you can read about your dwindling investments and shop with what little money you have left...all at the same time. Glory!

1 comment:

Bruce said...

It would not surprise me in the least to see a sell the news selloff in oil after OPEC announces a production cut. More worrisome to many MLPs is the continuing low nat. gas prices.