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Friday, December 31, 2010

FROM 2010 TO 2011!

The year closes out with a font style change so let me know what you think. All fonts must change just like in life. Okay lets get serious. This is the last day of trading and who knows what happens due to all the year end noise. But through the noise im going to stick my neck out on the chopping block. The 2 trends i think are going to remain intact as we head into January are Nat gas and Interest rates.

The nat gas chart as measured by UNG may have finally bottomed and i think we are headed for a breakout in the next few weeks. We have favorable weather (cold as far as the eye can see after this weekend) and rising commodities in general which natgas has not participated in. And there are some favorable trends emerging in the industry which might at least keep the endless supply from getting more endless.
And the other trend is interest rates which are in an uptrend on the long end and i see no reason for that to change in the next few months as this stairstep rally continues. We are completing another stair here and i think we are preparing for the next leg up.

And for MLPS we have one tailwind and one headwind. I have no pearls of wisdom here other than we are still in a tight trading range.
We have been in that tight range since the beginning of November and we are drifting near the top of the range. It would not surprise me to see us have one of those last hour runs that takes us to a new all time high close. But frankly i would wait until late next week to determine whether that has any meaning.

MLPS open flat to a little lower this morning. No news in the group and no upgrades or downgrade. The overall market is a little lower and no outstanding movers so far in the group.

Thursday, December 30, 2010

Somebody goosed Magellan Midstream (MMP) because its up almost a buck this morning. MLPS open higher and remain so. The overall index is up over 2 1/2 points with lots of fractional gains. The overall market is lower so there seems to me to be year end action going on. Most of the major mlps are up major fractions. Only a handful are lower at lunchtime and nothing notable.

The paint dry process continues as the action has been so so boring but at least its been with an upside bias. In fact there have only been 3 down days all month which is pretty unusual. How much of this have we borrowed from next month im not sure. A couple of markets that have been quite active and fun to watch has been nat gas which again had every reason to go down yesterday and closed flat and at the highs of the day. This is looking more and more like a triple bottom to me and today's inventory numbers might provide the surprise needed to take this up toward a breakout.

The rate market has been another place where the faint of heart need not apply. The last auction of 2010 went well and bonds rallied sharply yesterday from 4.55% TO 4.40% on the yield. But it appears that this was just a one day rally because we are back up to 4.46% this morning. No followthrough to yesterday so i think the next stop here is 4.50 and the a move to new highs in yield.

MLPS have been participating in the slow melt up along with other energy stocks and i see no reason for this not to continue. No news this morning. There might be some upgrade downgrade stuff going on. Im waiting for confirmation. Year end nonsense continues and look for perhaps some odd moves to occur here between today and tomorrow's close. Europe is done after today and i believe Asia is mostly done as well as they take off New Years Eve.

Wednesday, December 29, 2010


The action in natgas in the last 2 days is saying "bottom" to me and to some others, and the chart certainly has the look of a triple bottom. What has been more impressive to me has been the numerous attempts to break down only to end in late day upside reversals. So certainly the selling is drying up here and with the triple bottom in place, the first test for nat gas would be a rise to 4.75 or so on the gas contract, or for UNG a take out of that 6.30 level. After that its 5 bucks and 6.75 on this chart.

The mlp index has been going sideways through the month of December and there are 2 push and pulls going on. The stocks are probably sensing the rise in nat gas prices, and oil continues to push higher. In the other direction has been the rise in rates. So far neither is winning but i continue to believe that rates rising will be a headwind. If there is no rate spike into the 4 handle on the 10 year and a 5 handle on the 30 year, than that headwind will be manageable. Above those levels and then the selling could get quite serious.

First things first for the 30 year chart is 4.60 which is the recent high. Yesterday we had a failed middle leg of the auction of the 5 year. The 7 year is today so the market is watching that carefully. If it doesn't go well we could get the beginning of the next upleg to 4.80. That level takes us back to April levels.
This morning we have stock futures a touch higher as we have another watching paint dry day ahead. Crude is lower. Natgas is unchanged and rates are a little lower ahead of the open. No news on mlps and no upgrades or downgrades.

Tuesday, December 28, 2010


After yesterday's action in nat gas i am becoming more convinced that we have formed a long term tradable bottom. Yesterday Nat gas sold off rather hard but came roaring back and closed higher, creating which to me looks like a triple bottom. Then comes today's news that production has dropped thanks to production shutdowns and you have nat gas on the move. Its up 4 percent on the day and using UNG as a proxy here, 6.30 is the first target and then 6.75 is doable. I would not use UNG as the trading vehicle here since its front loaded on its futures contract. So unless your nimble i might opt for UNL which is a 12 month futures ETN will hold its value better should i be (gasp) wrong!

The treasury auction on the 5 year was a failure and yields are moving up asa result. Markets a paint drying again. Dow up 15, Nasdaq down 5. The mlp index is up 1.50 probably in response to the move in nat gas. TC Pipelines (TCLP) and Atlas Pipeline (APL) are the leaders today. Most mlps are fractionally higher.

Monday, December 27, 2010

Are we setting up for a big rally in nat gas? This looks like a triple bottom forming to me. Im using the UNG chart for illustration purposes only.

MLPS are down a little but the whole group is sitting in a range between minus 30 cents and plus 30 cents. Watching paint dry.

I certainly hope everyone had a wonderful Christmas. We are of course digging out here from a big blizzard. 15 inches on the ground plus drifts to 5 or so feet, and we had hours of winds of 50 to 70 mph last night. Busy doing some radio broadcasting work this morning but i have some time here to observe that markets are softer going into the open. The Chinese snuck a rate hike in on Christmas day but the markets dont seem to be reacting to badly to that. MLPS are seeing some firmness going into year end as i suppose money managers want to show them on the books since they were great performers this year. Not much happening this morning. There are no corporate developements and no upgrades or downgrades so far. Yields are flat to a little higher ahead of a two year auction so we will watch to see how that goes in thinner holiday trading. Crude is down a little and so is nat gas. Crude is at 91 and everyone is talking 100 which means we will probably see 85 first! Call me contrary!

Headlines as they break this morning..if they break at all. The open looms on what should be a lower start and then watching paint dry again.

Friday, December 24, 2010

Thursday, December 23, 2010


To all my readers a very Merry Christmas. Be safe and enjoy. Im taking off a day early. So much to do so little time to do it!!!

Wednesday, December 22, 2010


Running around today getting stuff done as im sure many of you are as well. Stopped in to see mlps up almost 3 on the index with much of the group higher. The dow is up 10 points in another watching paint dry session.

Will keep and eye on things as i run out again!

Tuesday, December 21, 2010

MLPS extending gains as the index is now up nearly 3 points. Its hard to get a feel here other than its a year end slow boring melt up.
Its been a slow melt up this morning with MLPS up over 2 points and while none of them have runaway gains, we are seeing some nice fractional moves higher. Yields are higher at midday as we near 3.40 on the 10 year and 4.50 on the 30 year. The afternoons lately have brought in some selling that takes the tape back down to even. There really isnt much to drive prices in either direction so its sort of like watching paint dry.

Cold weather and a driver for prices of energy continues and latest weather maps show nothing changing into early January. How much of that is priced into nat gas and crude is unknown. This morning nat gas is pulling back pre open from the big move up yesterday. Crude is up a little this morning and stock futures have been gaining strength pre open as yields drop a touch. MLPS closed up but off the highs yesterday and with no news and no upgrades or downgrades to speak of this morning, we'll just have to watch the tape after the open. Its likely to go into watching paint dry mode which is where the overall market has been for the last 2 weeks.

Monday, December 20, 2010

MLPS picking up a little steam heading into the close with the index up 1.55. Dow is flat and the S&P is up 4. Nustar (NS) is up 1.50 and that gets back half of Friday's losses!

3 trading days left this week..7 left in 2010.
MLPS back up along with most of energy as nat gas is soaring right now, up over 4%. The dow is up 10 points and the mlp index is up .75 at 350.75. Yields are higher after being down this morning. Nustar got downgraded by S&P to hold from buy based on valuation but something tells me Friday's 3 point drop means someone knew something ahead of time. Its up over 1 point today. TC Pipelines (TCLP) Natural Resource (NRP) and Oneok (OKS) all are up 1 point or more this afternoon.
After a higher open mlps are down now with the index off half a point as yields drop today. The overall market has turned lower in relatively slow trading. Inergy LP (NRGY) and El Paso Partners (EPB) lead the losers list down over a point each. However Oneok (OKS) is up over a point and Sunoco Logistics (SXL) and Nustar (NS) are solid winners. Bear in mind that Nustar lost nearly 3 dollars on Friday.

The action overall is still like watching paint dry but with a downward bias.
Buckeye Partners (BPL) went Christmas shopping and came home with some storage assets.

Thank God for google because now we can go back and call people on what they say in writing. 10 years ago this piece appeared in the Independent quoting scienctists from U.OF E.A. (not east Alabama) that winters and snow in Britian were soon to be a thing of the past. Thanks to Powerline for posting this. So its really only in the imagination of Britians and Europeans that they are experiencing the coldest December on record..records that in Britan go back to 1860!

But then again these bozos have already been discredited in the scientific community.

Monday morning in the days leading up to Christmas and you get the feeling that everyone is pretty much done for the year. Moves on a daily basis have been very small for the last 2 weeks and the stock market has traded in a 100 point range. MLPS on the other hand were in a very tight range until last week when bond rates took off. MLPS sold off and broke below the range. And it was disheartening that the big bond market rally Friday that took 20 basis points off bond yields did nothing to send buyers to mlp land.

Year end effects are probably working some distortion magic here as people are booking profits. Still for those thinking there could be a buying opportunity at hand might look at the following charts.
Kinder Morgan (KMP)has corrected only slightly in the pullback and they have already done their stock offering so for now the uptrend is intact.
Enterprise(EPD) is another big boy in the group and it has pulled back nicely under 40 bucks. This one has also recently done its stock offering and its pulled back into support. Enterprise is a huge chunk of the MLP index.
Nustar(NS) is interesting because it has been on a run recently as the rest of the group pulled back. Friday saw it drop nearly 3 dollars on no news. It may be just simple profit taking here although be advised that Nustar has not come to market with a stock offering in awhile but they did do an offering a number of months back with its stock price at lower levels. Seeking Alpha makes the argument that MLPS could have a strong 2011 along with other infrastructure plays. Im not 100% sold on this after 2 solid years, particularly if rates continue to rise on the long end.

Nothing happening on the news front for MLPS this morning and no upgrades or downgrades so far. Stock futures are higher ahead of the open. Crude is up and nat gas which was down overnight is now flat to a little higher. Rates are a little lower and the dolalr is up against the major currencies. BTW should point out the the weather pattern in the Midwest and Eastern US continues to indicate cold weather for the next 2 weeks or more. That should be supportive to energy prices.

Okay Christmas shopping should be rushed to completion so if you still need to get something last minute and in time to ship there is great coffee from the monks of Cody Wyoming. And also there is Amazon so you can click on the banner above or the one right here.

Your shopping through my link has paid my online bill for a couple of months and that really helps. Many thanks and i promise to stop the shamless self promotion. Oh and if you aren't shopping but want to buy me a beer and a can always hit the donate button on the side bar!!! Okay more shameless hawking!

Friday, December 17, 2010

Here we have a day where rates are dropping sharply and MLPS are still down. Now there may be alot of year end action going on but frankly as rates pull away from their recent highs, mlps should be bouncing but they aren't. Not exactly an encouraging sign. The index is down 1 point with the dow basically unchanged on the day.

Quite a week in the interest rate markets and while the overall market pretty much shrugged it off, MLPS did not and they have sold off about 2% so far. A bit of a reversal is in play this morning but the spike on the charts is still intact. Still the move is entitled to a pullback here and at worst i think is a pull back to the moving averages.

Not much happening so far this morning with no upgrades or downgrades to speak of. No corporate headlines to speak of. So this might be another watch your paint dry kind of day. I will keep an eye on things as i run some errands this morning and finish up Christmas shopping. And speaking of shopping don't forget the Amazon banner above for your convenience..and many thanks to those of you who have used it to shop!!! I appreciate it very much.

Thursday, December 16, 2010

Down nearly 3 points on the MLP index at 350 with a dip down to 349.60 a little while ago. Most of the group is lower. Energy Transfer Partners (ETP) is the biggest loser down over 1 and we have a whole slew of mlps down major fractions like Penn Virginia Resources (PVR) Oneok (OKS) Magellan (MMP) and others. It appears to me that mlps are going into a corrective mode here that could possibly take us down to the 200 day moving average. That is at 325 today and rising. Would be a 10% pullback from the highs. The key i believe is to watch what happens the next time bonds rally for a day or two. If mlps continue to sell if bond yields correct a bit..then the likelyhood of a trip down to the 200 day increases.

Just a few winners today moving up pennies and nothing to write home about.

Yesterday we saw for probably the first time, rising rates pressuring mlps and we saw the index fall nearly 6 points on a day where the overall market traded flat in a very tight range. I thought it might be a good idea to see where we are on the charts with respect to the 200 day moving average so i changed it this morning from the usual 34,55 & 89 day to 89,144 and 200 day expotential moving average. And you will notice that we haven't been there since April and we are no where near it now.

We are at the very bottom of the trading range we've been in for the last several weeks. The rate spike on the long bond and 10 year should abate (i thought it would have already) and a pull back in yields in the ultra short term is in order. So we must watch carefully here because if mlps continue to weaken, it could be the beginning of a wholesale move out of this space and into other things.

Yesterday i posted the line "more stock for sale" and was asked by reader JCarroll to elaborate on this. I was trying to say that mlps would go down as sellers rotate out of interest sensative and into other areas. However one must also address the fact that MLPS have been using their high stock prices and currencies and many have already come to market and done stock offerings. Not all have, however and if there is a threat to their currency, the rest of the group will probably come to the table. We have been in a bull market in mlps for 2 years and at some point the outperformance has to come to an end. By the way if the rate spike continues, we could see some sort of accellerated move occur, which translated means a big down day in MLP land. But for now we watch.

This morning begins with yields lower ahead of jobless claims. Stock futures are flat to a little higher. Energy is a little lower ahead of nat gas numbers and nat gas itself is selling off ahead of the number. No news on the mlp corporate front and no upgrades or downgrades so far this morning.

Eyes on the bond market folks as the open approaches.

Wednesday, December 15, 2010

The 10 year just touched 3.50 and the 30 year at 4.60. MLPS still down over 5 points.

Rising interest rates on the long side are beginning to take their toll. The mlp index is down over 5 points with the overall market basically flat. Buckeye Partners (BPL) Nustar (NS) Sunoco (SXL) Enterprise (EPD) and Oneok (OKS) all down a point to a point and half..and we have a slew of mlps showing fractional losses. Just 5 mlps are up right now and those are only gaining a few pennies.

Watch the tape this afternoon. The 30 year is at 4.58% and the 10 year is at 3.48%. The wall for the 10 year is 3.50% and i think if it pierces this level we could see market losses pick up steam as the afternoon wears on. And if rates are rising, look for more stock for sale in MLP land.

Yesterday's action in the 10 year and 30 year yield space was something! Yields climbed 20 basis points and look at that 10 year chart. Yields continue to soar and notice btw that we are only attempting to get back to where we were back at the beginning of the year where 10 year yields were up around 4%. CPI this morning and i wonder off yesterday's move whether they've already priced in a bad number. Also we're getting in a seasonal time where bonds tend to firm up for year end portfolio squaring and other money needs that come this time of year.

MLPS lost a point and change on the index yesterday and we still are just moving along those moving average support lines. We're going to break one way or the other soon but until then its just more of the same back and forth.

Markets are a little soft this morning and we have crude oil numbers coming out later this morning. Crude and nat gas are down this morning. Stock futures are down a touch. The dollar is up against the major currencies and yields are lower ahead of cpi.

No news in MLP land. Crestwood Midstream (CMLP) gets cut to neutral from buy at UBS. Not much else is going on this morning in the space.

Strange morning as my blog was gone. Suspicous activity. Could not log into my amazon account so had to make new passwords. Can't imagine why anyone would mess around here but with all the denial of service attacks being launched these days..who knows. Anyway its back to normal.

Tuesday, December 14, 2010

The fed did nothing. Markets were firm ahead of the fed and are about where they were before the annoucement. Bonds are lower with the 30 year trying to hold at 4.50%. The 10 year is fighting the 3.40% level. The mlp index is down just under 1 point. The list is split with fractional moves in either direction. Williams Partners (WPZ) is the biggest loser on the stock offering.


The fed will speak today at 2:15pm and hard to imagine any revalations today that will move markets violently in either direction. There could be a relief rally in bonds setting up and maybe once the fed is out of the way stocks may finally do something other than trade in a tight 30 point range every day for over a week now.

MLPS actually managed a 2 point gain yesterday led by Nustar (NS) which is over 70 and at new all time highs. This morning Williams Partners will be under the gun as it comes to market with a stock offering. Its bringing 7.5 million shares to the table and the stock of course is down 1 and change in the premarket. The chart below shows us that the stock has tripled from its bear market low. MLPS continue the trend of coming to market with the ability to sell shares at a good price.

Regency Partners (RGNC) is announcing it is expanding in the Eagle Ford Shale project. No pre market trades or indications on where it will open. Otherwise thats it so far on the news front and we have no upgrades or downgrades to speak of. Stock futures are flat to a little higher and i would suspect we'll be watching paint dry until 2:15pm. Nat gas is down as is the dollar. Bonds are down and yields up on PPI and retail sales which were hotter than expectations.

Monday, December 13, 2010

MLPS are up 2 points on the index on a day with a firm undertone to markets. Plains All American (PAA) and Plains Natural Gas Storage (PNG) are both up about a point thanks to the Barrons goose over the weekend. Western Gas (WES) is up 54 cents on the same article. Nustar (NS) is at 71 up 1 and change and at an all time high. Buckeye (BPL) Alliance Resource Partners (ARLP) Copano (CPNO) and Exterran (EXLP) all up major fractions. Not many mlps on the losers list and no standouts.

Bonds reversed and yields are now lower after testing the top of the range at 4.50 on the 30 year and 3.40 on the 10 year. Yields have been dropping since mid morning, down to 4.39 and 3.27 respectively.

He who watches paint dry certainly has an exciting existence. Effectively that's whats been going on in MLP land as its been sideways going on 3 weeks now.It has put the mlp index right along its 34 day moving average and its been straddling along it. All during this period the Dow Industrials have come back to its 2010 high and its also waiting to do something.The dow looks like it wants to breakout to new recovery highs but we're waiting for something ot make it happen. Last's weeks trading was pretty much an exercise in watching paint dry as we indicated in our opening line today.
The one chart that has made a decisive move higher is the 10 year yield (along with the 30 year) and we are in breakout mode. 3.40-3.50 is doable and we're just in push upward away from hitting that level. As i have said for weeks (and nothing over the weekend changes my view) that there is a tipping point where rising yields are going to cause a problem for the markets and for mlps. We are not there yet for the market. Maybe we're there for MLPS in the sense that we are giving up the flag of leadership. Certainly a more bullish economic outlook is a tailwind for mlps against the headwind of rising rates. The push and pull looks to continue. The end of year bias is higher and barring an outside event, i think we move sideways to higher overall through the rest of this month. Maybe the sellers went home for Christmas already and will be back on January 3rd.

Barrons over the weekend had a positive piece on 2 mlps; Plains All American (PAA) and Western Gas (WES). You need to be a subscriber to read the story. So look for some early upside in these 2 issues. No premarket trades yet but both stocks are bidding above the Friday close. Not much else happening on the news front this morning and no upgrades or downgrades so far.
Crude oil and nat gas are both higher as cold weather moves into the northeast today. The pattern looks cold for the rest of the month so that puts support under both markets. The dollar is down and stock futures are up ahead of the open.

Finally for those of you interested in getting some great coffee, I fixed the Mystic Monk link and it should take you right there for some very good brew. And thanks to those of you who have used the Amazon link above. 12 days until Christmas so plenty of time to get the gifts you need without going to the mall and dealing with traffic and all the rest of it!!!!

Friday, December 10, 2010

Raymond James upped the target on Linn Energy to 42 bucks and has the stock at a strong buy. The stock is up 35 cents today. It just did an offering of 10 million shares yesterday.

Still watching paint dry on the market but there is a firm undertone to prices. The mlp index remains up a little over a point.

Its that kind of day and in fact its been a pretty frustrating week for bulls and bears as we continue to ride in a very tight range. MLPS are up just under a point on the index. Nustar (NS) has been a nice winner this week as it nears 70 dollars and perhaps an all time high! Also up is Alliance Resource Partners (ARLP) as it sits just under its all time high. Most mlps are flat to higher by fractions. Not much excitement on the downside today so we head toward lunchtime in a pretty boring enviornment. There is a big move coming soon and the path of least resistence remains higher.

BTW many thanks to whoever bought the kindle and the printer through my amazon link above! And of course thanks to all of you who are doing their shopping through my link. And don't forget there is still time to do lots of Christmas shopping! I know my mystic monk coffee link is broken but i should have that fixed shortly.

Thursday, December 09, 2010

The mlp index is up on another day of watching paint dry on the overall tape. Bond market action was no surprise after the big spike up in rates this week. The 30 year auction went brilliantly with huge demand so 4.50% looks like the top for now. The 30 year is at 4.38 right now and the mlp index is up .75 led by Nustar (NS) which is up a dollar. The dow is down 31 points right now.

Nat gas is selling off hard today after the nice run up. Stock numbers were bearish as they always are but the market looked overdue for one of its usual hard down days.

We've been in a very tight 5 point trading range for the last 15 trading days in MLP land and one way or the other we're going to break. For all the consternation with the rise in long term bond yields, MLPS have held up relatively well. So with stock futures higher this morning and bond yields moving lower we might have some reason to take it back above 360. But lately we've seen early rallies fade in MLPS so we'll have to see what happens after the initial opening push higher.

Linn Energy (LINE) is doing a 10 million share public offering today so the stock is down 1.75 in the premarket. No other headlines to speak of and no upgrades or downgrades. The dollar is a little higher against the majors this morning, yields are lower. Stock futures are higher and nat gas broke out yesterday with a solid gain ahead of this mornings stock numbers. They are due out at 10:30am

A few of you have hit the amazon link (somebody bought a kindle!) and i thank you. This throws about 12 bucks back my way. Now that might sound like much but that covers some of my online cost and i think its great. So triple thanks to anyone who shops at amazon through my link!!!

Wednesday, December 08, 2010

MLPs still down but off the lows of the day. Got to 3.33 on the 10yr and 4.508 on the 30yr before auction results. Rates now about 5 basis points lower.
Now i am just guessing here but the 10 year yield is soaring up 10 basis points to 3.26% while the 30 year is at 4.40% and is actually flat from yesterday's 3pm close. If you ask me they are selling the 10 year to create demand for the auction. So my feeling is that they will rally the 10 year on the auction results unless they are an absolute disaster; in which case they will then rip the 30 year apart and drive the yield up there. All this will play out at 1pm when the auction results come out.

The yield rise is beginning to take its toll on MLPS as the index is down over 2.50 points and the dow is dow 25 points. Nothing tragic mind you but they are paying attention to whats going on with rates. Most of the group is down. Atlas Pipeline (APL) and Natural Resource (NRP) among the biggest losers today. Anything coal related is taking a hit in the broad market so that might be adding pressure to some coal mlps, although the nat gas end of it is up nicely. Nat gas is up 14 cents right now. On the winning side Transmontaigne (TLP) and Amerigas (APU) are up 50 cents but they are the exceptions in a weak mlp tape.

All the focus is on bond yields after yesterday's debacle in the bond market. The 3 year auction did not go well. Today we have the 10 year and tomorrow its the 30 year which has seen the last 2 auctions go bust. And the climb in rates continues this morning with the 10 year up another 10 basis points to over 3.20 as of the time of this post. Btw you can get the latest bond prices here and they update relatively frequently. Now of course for you regular readers the rise in long rates comes as no surprise since we've been writing about this for many weeks. It seems that now the rest of the world has noticed that something is going on. But what exactly is the rise in rates telling us? Well it could be saying that the economy is getting better, there won't be another quantitative ease, and the fed may be able to end QE2 early. Or the bond market could be saying "No more! We are no longer going to accept low yields given what you have done to your fiscal house." As long as stock markets talks itself into believe its the first choice, stocks can keep going higher. However i happen to believe that at some point, the markets will come to believe the second choice. And that's where the gnashing of teeth will begin. But for now, the bulls are in control.

Meanwhile as far as today's auction is concerned, given the 30 basis point rise in the 10 year in 2 days, today's 10 year auction might not be a bust. It could be that the yields are being driven up to attract buyers. If today's auction does not go well, it might be wise to keep an eye on the exit door. And for MLPS which have been in a tight sideways range for week's now, the spread between the top mlps and the 10 year is under 3% again. Food for thought.

So far this morning MLP land is pretty quiet. No upgrades or downgrades and no corporate news. Energy will be in focus today as inventory numbers are out for crude at 10:30am. Nat gas pulled back yesterday however the coldest air of the winter will be in the east next week and that is going to perhaps give nat gas another tailwind in its current rally. Stock futures are flat ahead of the open and the dollar is a little stronger against the major currencies.

Ok so i've moved the Amazon banner to the top of the page and if your shopping, it would be great if you could do it through my link..and also.for your coffee drinkers Mystic Monk coffee, roasted by Monks in Wyoming (i kid you not) makes a great gift to families or to yourself!! The link is right along the sidebar. Thanks ahead of time..i appreciate it and so do those who advertise in my little world!

Tuesday, December 07, 2010

Softness finally came in!
So much for the soft tape as the markets are heading back to the highs of the day. MLP index up a little over a point and the dow up 75. My ERY is not looking good though its only 20 cents below where i bought it. Might stay with it unless it gets out of hand in the last hour. Not every trade can be a winning one.

Speaking of winning trades the TBT Double Short 20 year yield is a big winner today up nearly 2 points and interest rates on the long end soar.
MLP index back up over a point as the market has firmed a little here after lunch. No runaway upside today but i'm still thinking some softness in the tape in the last couple of hours. Famous last words of course. Buckeye Partners (BPL) up 1.21 as the big winner this afternoon.

Bond yields approaching 4.40 on the 30 year and 3.11 on the 10 year after a so so three year auction. If they dont show up for the next 2, we could be at 4.50 in a hurry.
There is weakness creeping into the tape as we are well off the highs in both the Dow Industrials and the mlp index. The losers list is a little longer than before but most of those moves still are small fractions for the most part. Transmontaigne (TLP) the biggest winner along with Alliance Resource (ARLP) as they are both up about 1 point.

3 year auction results due out in 40 minutes and they will move the bond market for sure, especially if isn't recieved well. Usually there is no problem with this auction. Its tomorrow's 10 and Thursday's 30 year that we will have to watch carefully. I went long the ERY which is the triple short Energy (opposite is ERX) for a quick trade. The tape feels like the market will sell off this afternoon. In my never to be humble opinion of course. If can make a quick point or so...fine..then i will get out. This is for an ultra short term trade only.
After the spike up open there is some selling arriving on the tape. MLPS gains have been cut in half on the index up less than 1 now. This could be some program selling at the top of the range so lets see what happens once that gets out of the way.

Last night's news that the government plans to put us in hock for another trillion or so by extending tax cuts, payroll tax cut, and a few other goodies is sending the markets sharply higher at the open with the dow up about 90 points and at the very top of the recent range so we could be poised here for a decisive breakout to new 52 week highs. However also breaking out this morning are rates on 10 and 30 year paper which are up 11 and 9 basis points respectively.

MLPS are ignoring the rate rise and following the dow up 2 points on the index this morning. Eagle Rock (EROC) got an upgrade and target price raise to 11 bucks by RBC and the stock is up 34 cents. Alliance Resource (ARLP) leads the way higher up 1 and change. Nice fractional gains in Sunoco Logistics, Holly Partners (HEP) Oneok (OKS) Magellan (MMP) and Nustar (NS). Only a handful of losers and those are only down pennies so we are starting off quite nicely here. No corporate news this morning and no upgrades or downgrades.

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Monday, December 06, 2010


You look at the mlp chart for the last 3 weeks and its clear that we have been going no where fast. It appears like we are in some sort of tight sideways consolidation here but i continue to be disturbed that mlps have stopped making new all time highs. Now this is okay for awhile but if the market keeps rallying and breaks out to a new recovery high and mlps don't follow suit, then i will really be worried. Meanwhile its clear that we have ceded leadership to other groups. The reason for this is the uptrend in long term rates as we have been pointing out ad nauseum for the last number of weeks. Ben Bernake said on 60 minutes last night that more bond purchases are possible if the economy doesn't recover. In case you missed it you can watch it here.

Meanwhile it looks like a flat to slightly lower open this morning. Stock futures are soft but not by much. Bond yields are lower as well ahead of the open. Nat gas is 1% higher as colder weather will be in the picture in gas using areas at least through Christmas. The dollar is down and Euro markets are flat to a little higher. No corporate headlines for MLPS so far this morning and no upgrades or downgrades.

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Friday, December 03, 2010

MLPS are languishing today down .50 on the index as the market consolidates. The employment number was terrible and bonds initially rallied but after dropping to 4.20 on the 30 year, the yield is about to break through 4.30. Most mlps are moving fractionally in either direction. The list is pretty much split in half between winners and losers. EV Partners (EVEP) Natural Resource (NRP) Exterran Partners (EXLP) and Pennsylvania Virginia Resource (PVR) are leading the list of winners. Teekay (TOO) is down over a point as they are selling stock in an offering. Magellan (MMP) Alliance Resource (ARLP)Buckeye (BPL) and Holly Partners (HEP) lead the losers list.

Have a feeling we may just go sideways for the rest of the afternoon. Nat gas looks like it wants to go out near the highs of the week and i think there is more upside there. Yields may try to go out on their highs of the day.

The employment numbers were terrible this morning on face value but i tend to agree with many of the talking heads this morning as it just doesn't feel right given the other data we've been getting lately. But then again since the dow is up 350 in 2 days, i thought the market might sell off a bit anyway. And frankly if the numbers were really bad the futures would be much lower than they are right now. Bond yields went to 3.06 on the 10 year and 4.29 on the 30 year before the number and we are at 2.91 and 4.23 respectively as of this post.

MLPS have gone nowhere during this rally and you have to wonder whether this is a sign that we are about to take a back seat here to everything else. I will be interested to see how they react today with rates pulling back. Newswise this morning Teekay Offshore Partners (TOO) is doing a stock offering today. It seems everyone is coming to market with their stock prices not too far off 52 week highs. No other headlines this morning and no upgrades or downgrades.

Two charts of note this morning. Take a look at this nat gas chart. It certainly looks to me like it is putting in an important bottom in here so we look for those moving averages above prices to get penetrated in the short term. Weather patterns are very favorable for nat gas over at least the next 2 weeks.

Meanwhile even with bonds selling off this morning notice the nice uptrend in place on the 30 year. Nothing that's happened today changes the idea in my mind that 30 year rates are headed higher. Short term im thinking a run to 4.50% is doable.

Thursday, December 02, 2010

A lot of the bigger mlps are down today with the index flat and the dow up 100 points again. Spectra (SEP) on the stock offering plus Oneok (OKS), Buckeye (BPL) Plains All American (PAA) , Holly Partners (HEP) Energy Transfer Equity (ETE) and Magellan (MMP) all down major fractions. Helping on the upside is Alliance Resource (ARLP) as it keeps making new highs daily. In fact the chart of it above is a thing of beauty and it looks like its on another upleg here. Nat gas coming alive has really taken some of those names and put them out front. Atlas Pipeline Partners (APL) and Atlas Holdings (AHD) are also doing well today along with Williams Partners (WPZ) and Penn Virginia Resources (PVR).

Yields on the 10 and 30 year bumping against some headwinds at 3.00 and 4.25 respectively as they head into their close. The employment numbers will be a big mover tomorrow. I wonder whether the stock market up 350 points in 2 days is discounting a good number.

We have taken out 3% on the 10 year this morning before jobless claims and now that we have the number we see rates reacting little to the slight increase in claims. The rise in rates is telling us that the markets are normalizing here, while in Europe we wait to see what the ECB will do with regards to buying up soverign debt. If the ECB does the same thing the fed did here, then look for bond yields here to continue to rise.

And of course rising yields are going to have an impact on mlps to some degree. Yesterday we saw the index down on a strong up day. Enterprise (EPD) was the big drag certainly and it distorted yesterday's action. However one needs to raise an eyebrow here that MLPS are no longer making new all time highs on a daily basis. It appears that for now the leadership is shifting away from this group and going elsewhere. So we should watch as other areas outperform, how much do we underperform. And really is this a big surprise after after 2 years of gains totalling well over 100% from the bear market lows.

Spectra Energy (SEP) becomes the latest to sell equity and the stock is down 1 and change in the pre market. Not much else is going on this morning as far as corporate news and we have nothing on the upgrade downgrade list so far. Nat gas is rallying this morning ahead of inventory numbers. Cold weather will be the theme for the next 2 weeks in the Northeast and Midwest US. Euro markets are higher as are stock futures ahead of the open. The dollar is down against most major currencies.

Wednesday, December 01, 2010

While the MLP index is down .50 and off the lows its being dragged by the Enterprise Products Partners (EPD) offering. Most mlps are up major fractions. Alliance Resource Partners (ARLP) is up 1.50 as today's big winner. And we have a number of MLPS up major fractions like Sunoco Logistics (SXL) Natural Resource Partners (NRP) Martin Midstream (MMLP) and Alliance Holdings (AHGP).

On the losing side, outside of Enterprise, Inergy LP (NRGY) Boardwalk (BWP) and Buckeye (BPL) are down small fractions. Most other mlps are moving in small fractions from the unchanged level.

Natural gas took off around 11am this morning moving with the overall market which is up 240 on the dow industrials. Crude is up 2 dollars after inventory numbers and the government saying no offshore drilling off Florida for the next 7 years. Markets are strong overall. Yields are rising as we're sitting at 4.20 on the 30 year up 8 basis points from yesterday.

Looks like the 10 year yield is in major breakout mode and might break above 3% if the ism number at 10am is bullish for the economy.

The open looms large!
Whoops..missed this rather important MLP news as Enterprise Products Partners (EPD) does a public offering which has the stock down a buck and that will be a big drag on the index today. Also Spectra Energy (SEP) is getting assets from Spectra Energy Corp (SE). No pre market trading there.

Surrounded by Jets fans so i will use one of their sayings. Markets are in full blown rally mode this morning with stock futures up 15 s&p points. So the base held yesterday even with the late day fade. Still they have tried and tried to take the market down below support with no success at all. MLPS have held up quite well through all of this.

The uptrend remains intact and we didn't even come close to seriously testing the underline support and uptrend lines. So the question then becomes can we break out to new highs?

Bond yields on the long end are in an uptrend. Support was successfully tested yesterday and the moving averages are now slopping positive and completing their crossing. This morning the flight to quality trade from yesterday is being undone and we are near 4.20 this morning after being down to 4.05 yesterday intraday. At some point rising yields will be come a serious headwind but we are not there yet. Also i think MLPS will lag today as they usually do on days when the markets are enjoying big rallies. Its just easier and sexier to be in the more recognizable names.

No news and no upgrades or downgrades in mlp land. Crude and nat gas are up. The dollar is down and world markets are in rally mode as well. Euro woes seem to be taking a back seat today. Also going back to the overall market, the fact that the market could not sell off in the teeth of what is going on there with soverign debt is a good indicator of internal strength.