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Friday, December 30, 2011

7 ticks shy of 390 on the close and new all time highs. Now we can go home this weekend and worry about a double top! Happy new year.mlp bull market is over 3 years old and still motoring higher.

The mlp index hit 390.10 intra day and is up just under 390 as we head into the close. Kinder Morgan (KMP) is at a new all time high and is among the leaders. Nothing moving today that stands out really in either direction. The year is down to its final hour.

It appears that unless we get a complete meltdown today (which appears highly unlikely) mlps will breakout above 390 and we will close the year at new all time highs. The index started the year at 365 so a 390 close gives us a 25 point gain or about 7% and thats without distritubutions. So your 2011 total return was probably north of 13%! During a year where the market essentially went nowhere, this was a banner performance. EV Partners(EVEP) went from 40 to 65 in this stretch and Sunoco Logistics (SXL) adjusting for a 3 for 1 split went from 26 to 38. Also not too shabby. Atlas Pipeline Partners (APL) was another winner up from 22 to 36.
Plains All American (PAA) is the latest mlp to go parabolic and this happened after it announced its purchase of assets that put it squarely in the nat gas export market. Nat gas is at 3.00 on its way to being free. Since we don't seem to realize its value here in the United States we are sending it elsewhere. Who cares if natgas goes to zero, since you still have to pay to ship it. Plains will have the pipes so if you want it, you got to pay the toll.

This morning looks like a slightly lower open as books get squared for year end. The 10 year is at 1.89. The Euro is trying to hold 1.29. Nat gas is at 3 bucks and as i said earlier on its way to zero. Crude is down and gold is bouncing after several days of heavy selling.

Thursday, December 29, 2011


The mlp index is up over 3 points at 389 as the year end pile on into anything with a payout continues. One more day and we could finish the year in breakout territory. Dow up 115. Nasdaq up 20.

Wednesday, December 28, 2011


MLPS continue to benefit from year end pile on as the index is down just 1 point and a few ticks while the overall markets are down over 1% as of this post. The index is still just a few points below new all time highs as the outperformance this year continues as the days wind down to a precious few for 2011.

Much of the overall market action is centering on the EURO which is down to 128.80 right now and at an 11 month low. The sharp down move came this morning as markets are underwhelmed by Italian short term auctions today and we wait for the 10 year note auction there tomorrow with yields near 7% which is considered by many as the point of no return. Meanwhile here 1250 on the S&P is holding and the index is down 5 points for the year as of this post. The dow is up 5% and nasdaq is down 2%. We spent an entire year basically going nowhere.

Last hour will be important to see if bears get the upper hand or not.

Tuesday, December 27, 2011


As the last days of 2011 wind down, we are seeing mlps running toward new all time highs as the year end pile on continues. We are up 6 of the last 7 days in the mlp index and we are just a solid up close away to new all time highs. This recent upleg is being led by Plains All American (PAA) which has been moving parabolic ever since they company went out and grabbed some liquid nat gas assets. The up leg in Plains has evolved after a long sideways move in the stock which until November was going no where. But at least you were paid 6% to hold it in the meanwhile

Since mlps are among the best performers this year, i would expect to see the pile in to continue. However a note of caution is that what comes in to the price on the last few days of one year could easily come out of the price during the first trading days in 2012. Also whenever we've had these consecutive up days like this, it has come at the end of an up move for the stock market and not at the beginning of one. Still the bulls have control in mlp land until further notice.

For every winner in mlp land there is usually a laggard and Nustar (NS) wins that award this year. The stock price has been in a downtrend pretty much all year and its recent pop in price takes us up to a downtrend line. The company has not been able to grow its payout and that is the bottom line. Liquid nat gas is where the money is going and Nustar (NS) is big on gasoline which has seen margins being squeezed to some degree. If we get into a world where margins (crack spreads) widen and gasoline prices rise due to a genuine increase in demand, Nustar could do quite well. But right now it remains a mediocre performer but at least it has a stable payout.

No news this morning on the corporate side, no upgrades or downgrades so we have no drivers there. Stock futures are a little lower as holiday trading continues. Gold is down 10 bucks. Oil is flat. The euro is up a couple of ticks. Europe remains the driver with Italian auctions coming tomorrow. Other than that markets are pretty quiet.

Meanwhile the Market Oracle who predicted a melt down last week (we got a melt up) continues to point out that the market is could possibly collapse this week. He suggests to keep an eye on the nasdaq and the nasdaq 100 which has underperformed badly in the last few weeks. It seems to me that its going to be hard for the market to crash on a week where no one is here to witness it let alone trade it. I will agree however that the charts are not looking good and the 200 day moving average retest is happening right now for the S&P 500.

Thursday, December 22, 2011


Merry Christmas to all my readers. I'm going to take a few days off and come back rested for fresh perspective on December 27. To all my readers, i wish you the very best and all the blessings of Christmas to you and your families!!!!

Tuesday, December 20, 2011


One good Spanish bill auction today and a dollar selloff has the risk crowd concluding that all has been solved (at least for today). The dow is up 280 as of this post...the nasdaq is up 72..and mlps are up 3.50. MLPS are actually now within 3% of new all time highs. The index is at 378 and needs only to get to 390. If the year end pile on continues we could get there before the month is done. So much for the Hindenburg Omen which did not give another signal today (at least so far).

Going to be doing pre Christmas errands so will post updates when i can. The Euro has pulled back from its high of the day so keep an eye on this to see if it brings in sellers later today.

Monday, December 19, 2011

Losses accelerating. Dow down 120. S&P down 16. Nasdaq down 35. MLPS up but less than 1. 72 new highs today plus 110 new lows gives us a total of 182. Another Hindenburg Omen signal today. That is the 4th one since last Monday. See this morning's post for more info.

Bank of america just broke below 5 and the rest of the market going with it. Dow down 110.  Mlp index up just 1. Nasdaq down 32. Could we see a rush to the exits at 3:30????

MLPS are up 2 as the market continues to hold just off the lows of the day. Those lows will hold as long as Bank of America doesn't break below 5 dollars. It came down to 5 again about 30 minutes ago and held for a second time. Last hour will be make or break.
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For the umpteenth time the ECB head Mario Draghi has told us that the European Central Bank has no intention to bail out the sovereign nations in the Euro zone. Markets apparently think he may mean it this time. We've gone from plus 50 on the dow to minus 65 right now. Bank stocks are on the verge of breaking down as Bank America is trying to hold that magic 5 dollar number. Meanwhile the MLP index benefits from a flight to yield as it is up 1 point. It also is benefiting from year end action but if this sell off gets serious this afternoon this relative strength my have a problem holding on.

Kinder Morgan is up a buck and near new all time highs. Plains All Amercian (PAA) and Western Gas (WES) are up nice fractions. Most mlps are either flat or up a little. Buckeye Partners (BPL) and Williams (WMZ) are the biggest winners with Williams up over 2 dollars to just under 60.

The tape could get very ugly this afternoon if bank stocks really start to implode. Have not seen any followup stories on the Hindenburg omen or whether the signal was triggered again today. I will keep my eyes open on this. BTW the 10 year yield is down to 1.82%. This is not good.

Sunday, December 18, 2011


For those of you who have never heard of the Hindenburg Omen it is named after the German Hindenburg which crashed and burned in New Jersey in 1937.
However for stock market players it has an entirely different meaning. The signal does not come often and is far from perfect but it is something we should pay attention to. Here is a good explanation of how it works. The signal was triggered 3 times last week so it seems to be occurring in clusters. When we see it in clusters it can be ominous. Here is at least one person's interpretation of what may happen this week and if this works out, Santa is leaving us with a big sack of coals.

As of this post, stock futures were trading lower along with the Euro as Asia sells off. As of 10pm EST Sunday night, no sign of any major unraveling of stock futures but as always we will watch the Euro as markets continue to trade tick for tick with the Euro. If we think back to 1987 that crash was triggered by a massive sell off in the dollar. This time around its a massive sell off in the Euro that will perhaps be the trigger mechanism. Or this could be just a lot of end of year noise showing up as we continue in the push and pull world we've been in since August.. Still i think we need to pay attention to this.

Friday, December 16, 2011


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MLPS are higher with the overall market after the open. The index is up about 1 point. One mlp that is not up but down 18 cents which for a stock with a 1 handle is a lot, is Constellation Energy Partners (CEP) which was once over 40 bucks. Is it year end tax selling or is it this piece of news or is it the prospect that this mlp is going bye bye? Down 18 cents at 1.86.

Stocks are higher with the dow up 80 and the S&P up nearly 13. The nasdaq is leading the way higher. The euro is now flat and the 10 year yield is down to 1.88. Is the 10 year telling us that a downgrade is coming later today?
Inergy LP (NRGY) priced its IPO of Inergy Midstream (NRGM) and that starts trading this morning. Nothing on the bid and ask yet.

Futures are at the highs of the morning calling S&P up 11 points. CPI at 8:30 which will be in line as it always is because we use core which means all the things we use that have been going up in price like food and rent don't count in the eyes of the federal reserve.

Headline risk exists on both side of the equation today as we have some legislative moves in Europe overnight which has markets a little higher. Italy had a bill passed saying they will reform which we all know is a huge joke but lets give them the benefit of the doubt this morning. In Germany there was a vote to withdrawn from the ESM which was defeated. The headline risk on the downside may come after the European markets close as everyone seems convinced that S&P will be downgrading a bunch of European countries. I would imagine this is priced in to some degree but if S&P were to take some country down 2 notches instead of one or downgrade and leave the outlook negative, that might cause a sell off. But for now at least we will probably start higher. The Euro is rallying up half a cent right now which is still pretty much a dead cat bounce from the low of 1.2950 on Wednesday.

Above and below are 2 charts of probably the best performing mlps of this year. Oneok LP on the top has been moving of late in almost parobolic fashion. The company has done everything right as it expands in all key markets and continues to grow its distribution. Its up over 20% from October alone. Still you have to wonder if this parobolic move has the look of a year end pile on and if one were to want to buy here or add to positions it might be wise to wait for a pullback.

Sunoco Logistics has been another star performer and note that it has sold off a bit after the stock split 3 for 1. The pullback has been into support and has been pretty reasonable in nature. This company continues to also do everything right and while both companies mentioned have had incredible runups...there is still no sign that these stocks have topped out.

The weekly MLP chart is interesting. Noticed the uptrend that began 3 years ago this month has now evolved into a sideways move. The question is whether we are consolidating in here before another upleg begins in 2012, or are we building a longer term top and setting up for a larger pullback in 2012.
The answer i believe will depend on what kind of overall market we see for next year. If we continue to muddle back and forth with no major meltdown of Europe or China or whatever, then money will continue to go to companies that can grow distributions and payout yields of 5 to 6% or higher. However should we have major market meltdown due to Europe, China, or whatever, or if credit markets seize up in a big way, then i would look for mlps to sell off as well. And in this we have the big question. But at least for this morning we can put off that question as stock futures are pointing to a higher open. Commodities are dead cat bouncing except for natural gas which will soon be given away for free. The dollar is correcting this morning which is lending support. 1225 on the S&P seems to be the new wall of resistence as we hit it yesterday only to pullback. We will probably open there this morning and we will see if sellers will come in ahead of the weekend.

Wednesday, December 14, 2011

You have to love when you post almost at the low tick of the day and we have been coming off those lows ever since as the Euro makes its way back to 1.30 and trys to hold it. Dow is down 70, Nasdaq down 29, and mlps down less than 2 points. But commodities continue to remain near their lows with gold down 78 bucks and crude down over 4. I have to think that this intra day rally will run its course and more sellers will arrive late in the day. But, honestly, nothing surprises me anymore. The 10 year btw is at 1.92% which isn't exactly a ringing long term endorsement.

The tape this morning certainly has the feel of something big. There are 2 realizations that may e finally setting in. The first is the Europe is not going to do what it needs to do because politically it does not have the will. Plain and simple. The sovreigns are bankrupt and i think that its going to take one headline at the wrong time to push this all over the edge. Commodity markets are crashing today. Gold is down 80 dollars today and under 1600. Someone is selling because they need cash and that means that there is some major institution out there under stress. The second realization is that while we are in better shape here relatively speaking, this idea that we can somehow stand alone while the rest of the world implodes, to me is just silly. We saw alot of the same logic pass in 2008 and we know how that ended.

The charts are not looking good. Short term double tops are in place on the S&P 500. We took out all the fibbonacci support this morning. The 50 day moving average is getting has been taken out. 1200 is the next stop and we could get there in a big hurry. After that its 1150 and then 1100. Its not looking good.

The mlp index has been the standout of strength but we are seeing signs here that we may be at an end of this. The index is down 4 right now and moving in line with energy as oil is down 4 dollars. When you have to sell what you got. The weekly chart shows what could be a long term double top being put in. We should watch that development carefully.

I have thrown up the nasdaq chart to illustrate the worst looking chart in the group as it is breaking down and gone into sell mode on the technicalls. Its not pretty out there.

Most mlsp are down major fractions to a point. Cheniere (LNG), Holly Partners (HEP) Alliance Resource Holdings (AHGP), and E V Partners (EVEP) are all down 1 or more with EV the biggest loser on the day.

Tuesday, December 13, 2011

The euro is at 1.3079 as of this post down another cent on news that Angela Merkel said something she has said 100 times before but it is beginning to sink into the market that Germany actually means what it says when it comes to shelling our more money to save Europe. That answer has been and continues to be a resounding N O.

Markets are off their highs. Mlps are fractionally lower with nothing major happening in either direction. Markets will probably mark time until the fed announces.

Markwest Energy (MWE) bottomed in 2008 under 6 bucks AND more importantly never cut the distribtution back in the meltdown. The brave among you have enjoyed a 9 fold move plus a nice payout along the way. They have done everything right. This morning the stock is down on an equity offering but the company is going to buy out the rest of its Marcellus Venture from its partner.

The stock is down 1.70 pre market but with mlps being the star performers, its probably another buying opportunity in the longer term. This of course assumes that the world doesn't come to an end.
MLPS did pretty well yesterday losing less than a point with the dow down 160 on...drum roll please....EUROPE! Since we continue to be tied to the hip with the Euro i thought i would put up both the S&P chart and the Euro chart.

While both markets seem to be moving together, the almost tick for tick connection has only be a relatively recent relationship and who knows how long that will last. The moves from day today continue to be back and forth but the VIX is now under 25 which is probably telling us that the next few weeks with Christmas probably means that the market swings will be a little less mind blowing and volume continues to dry up. Famous last words.

This morning's open pretty much undoes yesteday's losses which undid Friday's gains which undid Thursday's losses. MLPS opened up and are still looking to decisively clear the 375 level. Crude is up. The Euro is unchanged after being up earlier. Bulls are frustrated. Bears are frustrated. And we have the Fed today at 2:15pm.

Monday, December 12, 2011

Btw i love this quote from an S&P economist speaking on the Euro mess. Read it fast and i will translate.

Six said the summit had made progress "in terms of getting the governments mentally ready to commit in writing in some constitutional format to a medium-term fiscal strategy which would allow the ECB to become what it is not at the moment, at least officially, a lender of last resort."

Okay in other words, they are planning a plan to create plan. And you wonder why markets realize that they've essentially gone no where.
It took 45 minutes for all of Friday's gains, which undid Thursday's losses, got undone. The dow is down 170 and the nasdaq is down 50 as markets are getting very nervous over Europe and the Euro which has finally started to unravel...about to test 132 which is the October low. If that goes it think you could see the equity sell off really get ugly. MLPS are holding up okay relatively speaking down only 2 points as of this post.

EV Partners (EVEP) is down a little over 1 as the biggest loser. Holly Partners (HEP), Buckeye (BPL) Alliance Resource (AHGP), Plains All American (PAA) and Natural Resource (NRP) are among the mlps losing major fractions. Cheniere Energy (CQP) is among the small list of winners up 50 cents as it signs another big deal on exporting liquid natural gas, this time to India.

Since i started writing this point we have come off a little off the lows but still down 160 on the dow. Its Europe folks and it doesn't look good.
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We are entering the last 3 weeks of 2011 and there are 2 ways we can look at the short term future of mlps. This group has been among the years better performers. We started the year with the index near 365. We've been as low as 320 and as high as 390. The index right now is up about 3% with a total return around 10% on average. Not bad with the S&P flat as of today's open. If we see a run for performance in the next 3 weeks, mlps could shoot up to 390 and challenge all time highs. If Europe spins out of control then we could see a move to sell in order to save profits. Honestly with these swings back and forth, i can't begin to guess which way we will go.

The dow chart in the short term is back at the very top of the range which is just above the 200 day moving average. We've been turned back from here when the rally peaked in October. This second peak comes on worse technicals but these days technicals don't seem to be working very well. We keep getting a years worth of moves in a matter of days so as long as that condition exists its hard to to predict which way we will go. Longer term i am not optimistic. MLPS at least should provide relative saftey barring some completely collapse in credit markets.

No news of consequence this morning on the tape for mlps and no upgrade or downgrades that i can find so far. Stock futures are following Europe which has given back all of its post summit gains. Rates in Italy, Spain, and France are higher this morning which is making the euro shakey. Its down to 1.325 this morning. A break below 132 could be important as that could be a level that sends some banks to the borrowing windows of the ECB in order to keep their doors open. Crude and nat gas are both down. Interest rates here are down as a flight to relative quality.

Friday, December 09, 2011


I happened to find this randomly last night and it is really worth watching. Like her or not Mrs Thatcher nailed it oh so many years ago.

The only thing decisive that came out of last night's end to the latest version of coffee at the espresso bar is that Britian has had enough and pulled out before the check came. As for the meeting itself it was another example of kicking the can down the road. Instead of a bazooka to solve euro woes we got (as wonderfully stated by Rick Santelli on CNBC) one of those pistols that blows bubbles. Market reaction has been much more muted this time around and European markets have been slowly eroding this morning. The euro hit 1.34 and has gotten turned back and we are almost flat there as well. Add to that warnings from Dupont, Texas Instruments, and others and we have the makings of a weak bounce at the open and then probably an attempt to take them down to very important support.
Moving averages on the down are around 11,800. On the S&P it all clusters around 1225. If we get there later today, a break there would be very bearish in my view.

MLPS lost 4 yesterday and has been fighting 375 on the index which is wall it can't get through. Enterprise (EPD) weighed on the index yesterday due to its equity offering. We are still an area of relative safety. I noticed yesterday that Sunoco Logistics (SXL) which is probably the best performer in the group was among the bigger percentage loser here. There is probably some year end action going on here with post split profit taking. Be advised that now that we have all sorts of ETN's and ETF's out there in MLP land, this sort of thing is going to happen. My worry is what happens here if the market really gets in trouble. With all the leverage out there there is the potential for things to get ugly. Another negative sign btw is crude oil which move further away from 100 on WTI and 110 on Brent. Its another sign that the economy is slowing down.

This morning corporate wise we have no news and no upgrades or downgrades. Markets were higher earlier but continue to slowly fade. The Euro as i post has now turned down. Crude is lower. And the best measure of what is happening is the 10 year which is at 1.98%. The bond market is telling us with a sub 2% yield is telling us that Europe solved absolutely nothing.

Thursday, December 08, 2011

The rumor turned out to be a leaked summit draft which Germany rejected. Dow rallied from minus 180 to minus 90 and then when the news hit went in reverse to minus 226 before finishing down 196. Mlps finished down 4 and change.

Got to love the 3:15 rumor rally. Right on time and the dow goes from minus 180 to minus 130. They are so obvious. Not sure what the rumor is.

Markets off the lows including mlps. Euro is off its low. Would not be surprised if we rally in the last hour on one last chance to hope that Europe comes up with something in its meeting; other than a schedule for the next meeting. Dow off 140, S&P off 19, Nasdaq off 36, mlps off 4. Crude is closing down 2 bucks and near the lows of the day, under 100 bucks. Brent is at 1.08.
Market at the lows of the day down 175 on the dow industrials, nasdaq down 40 and mlps are down almost 5 points. The Euro is down a full cent as it tests 1.33. The VIX is over 30.

The markets have been holding on to this delusion that somehow the ECB was going to come to the rescue of Europe. If that is the case, this morning's announcement from the ECB that it plans to do absolutely nothing with regards to rescuing Europe, brought markets down to reality. Bulls are insisting that the ECB is not going to show its hand while politicians meet tonight in the latest meeting. Still you have to ask yourself that sometimes when it acts and quacks like a duck, IT IS REALLY A DUCK! If the ECB says we are not going to backstop the Eurozone debt in any way shape or probably means it. Still there is a meeting tonight, and given the fact that any headline that gets floated this afternoon could move the market rapidly, an up close from here would not surprise me. Lunchtime has the dow down 120 and off the lows of the day.

I thought i'd throw up 2 charts of the S&P. Notice we have a potential double top here short term as once again the 200 day moving average turned the market south. Notice also that the 50 day moving average lies also where my fibbonacci moving averages are located..between 1220 and 1230. So there is a ton of support here underneath us.

The mlp index meanwhile was turned back at 375 and its down 4 points on the index. The chart here looks much better overall as the index holds above its 200 day moving average. The index is being dragged by a 9 million share offering from Enterprise Products Partners (EPD) which makes up a big part of the index.

So we are at lunchtime here on Wall Street. The Euro summit begins this afternoon our time. Here is a live blog thanks to the Financial Times. BTW crude is selling off and this is putting pressure on energy stocks in general. It should be a fascinating afternoon. Don't be surprised if we see a rumor that takes the market off its lows like it yesterday at 3:15pm. Someone refloated the IMF will rescue Europe rumor which was denied but it took the market up 120 points in a big hurry. Nothing is real!

Wednesday, December 07, 2011

MLPS just turned higher as the market comes off the lows of the day. ECB tomorrow.
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Okay so there are all different ways with this but for Europe the cyst is about to rupture (yuck!) as we have the ECB meeting tomorrow and the latest meeting of espresso drinkers (im one so i can say this) will come foward and tell us when the next meeting is. The latest new-old proposal about levering up the ESF by splitting it in 2 was rejected by the Germans. Yields in Europe are rising again in France and Italy. Yields are falling in Germany and here in the U.S. Its more of the same crap. Frankly i am shocked that the markets have been so patient and maybe its going to take a big financial accident to get Europe to act.

Since we can't seem to lance the Euro boil (yuck again) lets talk about more pleasant things like the mlp index which is sitting just 4 percent below its all time high but it is having trouble here getting decisively through the 375 level. Nustar (NS) is the latest to do an equity offering and that weighed on the index yesterday.

The headwinds on the charts come at the same time as the key metrics of the overall market have once again stalled at the 200 day moving average. This is the 3rd trip up in here and it will be the next 3 days that will decide whether we break above that or put in a top that will last for quite awhile. Some are predicting that this will not end well.

Some corporate news is an IPO that is coming as Inergy LP (NRGP) will be ipo-ing its midstream assets and the symbol there will be NRGM. Not much other corporate news in the group and no upgrades or downgrades. Stock futures are lower following Europe and the Euro. Crude is a little lower ahead of inventory numbers. Yields are lower as the dollar moves higher. The metals are a little higher. The open looms.

Monday, December 05, 2011

MLPS are still up but well off its highs as overall markets have sold off on the headline from the FT that S&P is putting 6 euro nations including Germany on credit watch negative. No comment from S&P yet. The mlp index is up 1.33. The dow is up 70 after being up 160.

The messiah is speaking right now and playing class warfare again. Last hour will be interesting especially if we get confirmation from S&P. Germany being on that downgrade list must have been a big surprise. The Euro has wiped out all of its gains and is now down under 1.34.

MLP are breaking out of the top of the range which has been capped by 375 on the mlp index. Pre open we already have Kinder Morgan Partners (KMP) up 1 and change and knocking on the door of 80 dollars. The all time high on the mlp index is 390 and since the overall market is rallying on Europe solving all its problems this week, its hard to see what is going to stop it.

The dow chart is nearing the top of its recent range which is 12,200. Thats where the rally off the October 25th version of Europe solving its problems wound up. S&P futures are up 17 right now and dow futures means we open just shy of that 12,200. The market pretty much trades tick for tick with the euro which is at 1.3443 this morning, up 1/2 cent from Friday's close.

Back to mlps it is reasonable to assume that if the overall market holds together we could see an end of year rush into mlps since they are the only stock group that has done much of anything this year. So we could have portfolio managers rushing to by them which will put added buy pressure on Kinder Morgan (KMP), Enterprise Products (EPD) and maybe even Plains All American (PAA) which just made that billion plus purchase into the liquid natural gas market which is all the rage these days. Still all this positiveness could be dashed this week if the Europeans put off resolving their issues for a few more months where they can meet and sip espresso again. But of course we all know that European nations all just can't wait to give up their economic sovreignty to Brussels and are lining up to do so.

As the joy spreads everywhere this morning, crude is up, interest rates are up with the 10 year yielding at 2.10 percent. Nat gas is down sharply as winter has been cancelled. Bring on the open folks and enjoy the prosperity.

Friday, December 02, 2011

Mlps finished up a point on the index while the overall market came back to the flat line as the euro sold off hard to 1.34 from 1.3550. Spend ur weekend buying up motion sickness pills for the next 2 weeks.

We have rumours flying that Spain will be downgraded after Europe closes. The euro is down to 1.338 from 1.35.5 earlier today. Also congress is getting a bill ready to stop the IMF from lending money for a euro bailout. Here we are off the highs with the dow up 75 right now. The mlp index is up just under 2 points. Kinder Morgan (KMP) hits another all time high and nearing 80 bucks. Enbridge is down 1 and change on its equity offering.

If there was any remaining doubt that Europe is driving this bus, this morning should pretty much dispel that notion. Pre employment number trading was being totally driven by a rumor or made up news story that the ECB was going to lend money to the IMF. That sent euro stocks zooming higher and we of course followed along. The employment data was mixed at best and since a big number was built in to trading this week, anything was bound to sell off. Still we saw prices hold their gains until we got denials on the ECB rumors. And since then we're seeing markets pull back. So in the end its all about Europe. We will sink or swim on what their politicans decide at next Friday's summit where to hold the next summit and who will pay for the espressos. This is not a good place to be.

MLPS however remain a great place to be in all this turmoil. Not many sectors have held up like this one and you get paid 5-7% while you have your money parked here. Yesterday we saw a 4 point gain here, pushed higher by moves in Plains All American (PAA) spending 1.7 billion to expand its presence in the liquid natural gas market.

The stock moved up on the news and it has taken the mlp index ever close to its all time high of 390. It really is pretty much the last group standing in this market. This morning we have RBC raising its price target on Targa Natural Resources (NGLS). And we have a stock offering from Enbridge Energy Partners (EEP) which joins Holly Partners (HEP) who did an offering yesterday. No other news and no upgrades or downgrades. Stock futures are off the highs and we are at the place where the October rally stopped on October 25th. The Euro has come off 1.35 this morning which may be the new ceiling there. Bonds rates were higher but they have now turned a little lower as Europe comes off its highs.

LinkThe chart above is one i found yesterday and i think its worth paying attention to. Its a chart of investment grade corporate bonds. Notice that its been in a solid uptrend until early November when it has been falling. And note that it has pretty much broken its uptrend line. Is this chart sending us a signal that corporate debt is deteriorating? And while it has followed the equity market in general, it has not rallied at all this week with the dow up 900 plus points. I think we should keep an eye on this. Perhaps this is another indicator that stress in the credit markets continues to build.

Wednesday, November 30, 2011

Testing my smartphone

Posting using the google app from my smartphone. Horray!

Mlps closed basically flat as the dow closed up almost 500. Right now futures just a little lower as asia plays catch-up. The euro is up a couple of ticks but under 1.35. Europe is still a problem inspite of central bank actions.


Central banks from around the world got together and orchestrated a one day rn ujp in stocks. The move is to get the banks working again in Europe. My own view given the hints of the last several days in the bond market was that someone out there was about to go under and the central banks had to do something to stop the blood flow at least for the time being. So the end of the world has been averted at least for now and the dow is up 400 points in relief as of this post..not too far off the +430 high of the day. And if the rally were really the beginning of something big, why is the 10 year yield only back up to 2.06%?

MLPS however are not doing much. The index is up a little over a point and while there are some individual moves like Williams (WMZ) which is up 1 and Atlas Pipeline (APL) also up one, most mlps aren't doing anything unusual. Kinder Morgan (KMP) is at another all time high in here as it nears 80 bucks. Sunoco Logistics (SXL) is down 2 but still over that magic 100 buck mark.

Last hour approaching. I would think with the Euro off its high of the day and bond yields not rising would be a reason for them to lean on this rally. 12000,1240 and 2600 all are psychological lines in the sand. Technically we are around or still below the 200 day in most averages. But its very hard to fight the tape. Overall we have seen the dow go from 12,200 to 11,200 and then back to 12,000 in 9 trading days. MLPS have been in a range between 360 and 370 during that stretch. At least its relatively stable somewhere!

Tuesday, November 29, 2011

MLPS still up 1.51 but there is distress showing up elsewhere. Maybe the reason why the 10 year did not sell off yesterday in the big stock rally is because it is smelling a bank in trouble. Bank of America is flirting with 5 dollars right now. If that breaks below 5...look for a big late day selloff.
This does not look good folks. Spreads are about to blow out.

We seem to be at the point where our group is probably the last group standing. When you scan the charts from the broadest energy stock index to techs to everything else, all the charts have broken down. Yesterday was another periodic exercise in delusion. MLPS seem to be the only group that is working. Check the new 52 year high list and you will find mlps and not much else. But if we are on the verge of a major breakdown, we are going to go down with it. The question is whether we will hold up better than everything else. If we look back at the 2008 unwind, mlps were being sold hand over fist because of the massive seizure in the credit markets. If there is another seizure than we could see another big unwind. However the lesson of 2008 was that when the bottom was put in, it was a lifetime buying opportunity. First things first though is 355-60 support and then 320 which has been the short term bounce point. So lets keep a watchful eye.

BTW based on the weekly chart, after 320, 280 would be the next logical place. I think its all going to come to a head in the markets over the next few days.

No news of consequence this morning on the corporate side and no upgrades or downgrades. Stock futures are following Europe tick for tick. Europe traded off the Italian auction which somehow was viewed as not a disaster. Record yields here are absolutely unsustainable. The clock is ticking and ticking fast.

Monday, November 28, 2011


Europe is front and center this morning again as we once again have another plan to plan to have a plan. Combine that with retail sales this weekend that were especially strong among groups of people that use pepper spray and you have futures up sharply. In reality a bounce of size was coming considering we've been down 7 days in a row and closed last week on the low tick of the week; 900 points down in 7 days means we open up. The question is what happens after we get through the open and whether they start to lean into this rally.

MLPS held up pretty well last week when compared with the rest of the market which fell apart. Straddling support we will of course head higher on the open this morning and here too we will see if they lean into this after the open is worked through.

No corporate news this morning and no upgrades or downgrades this morning. With all the risk on trades working this morning everything is up including yields which are up 10 basis points on the ten year to 2.07%. European yields were higher overnight in Italy and Spain but are now a little lower. In the end inspite of all the day to day noise absolutely nothing has changed. Europe remains in the edge of the abyss, the US is on the edge of a recession, and no solutions are in sight. Again watch the rally and see what happens later today.

Thursday, November 24, 2011

Just a quick update before i hit the road. The euro rally has evaporated and stocks in Europe are selling off with the Euro which has dropped 1/2 cent in the last hour. Stock futures here have turned lower.

Okay sweet potato biscuits ready to go...hitting the road shortly.

Just want to wish all my readers a very happy Thanksgiving to you and your family and be safe and eat well today!!! Every year we are on this earth is a good year folks no matter what markets bring you!

Euro markets are not falling apart this morning however they bounce we are seeing is about as dead as a dead cat bounce you can get. And i just noticed that the Euro has turned lower so euro stocks have come off their highs. The DAX was up 100 now up 50. The FTSE was up about 30 now up only 5 and the CAC is up 25 after being up about 50. Our own stock futures are trading and they are up about 40 dow points...which gets you back the last 5 minutes of yesterday.

And since tomorrow kicks off the Christmas shopping season let me say 2 things. First off, refuse to participate in that horror of black Friday which begins tonight. I refuse to have any part in retail as they have ruined Thanksgiving and it really should be stopped. And (here comes the shameless self promotion on my part) if you really feel the need to shop, do it through the amazon link above. It doesn't cost you a dime and Amazon sends me a small cut which lets me pay a bill or 2! Some of you have and i really really really really appreciate it!

Wednesday, November 23, 2011

Barron's blog has mlps mentioned today. Don't need to be a subscriber.

Markets off the lows as people start to head home for Thanksgiving.
The mlp index is about to break below its moving average support lines though its down a little less than 5 points. Markets are imploding including the euro which is selling off hard after holding up for so long. The mlp index is among the last measures to breakdown below support. The markets sort of remind me of this!

Europe is clearly melting and is Dorothy the ECB? Or is the scarecrow Ben Bernake.."if i only had a brain!"
Europe is on the edge. Good interviews and perspective in case you missed it this morning.


For mlp holders being long over the holiday doesn't afford too much risk. The stocks remain (for now) closer to their highs for the year than their lows. So far they have resisted the bearishness that is spreading across all markets. The support levels for mlps remain above the supporting moving averages and they may be one of the last groups to be in this position.

The dow was the last chart to break below the 50 day (of the major averages) and we are now have pretty much nothing from here down to the lows around 10800 or so. The news this morning is not good all the way around from the China PMI index dropping below 50 and the lowest in 32 months to the situation in Europe which may now being getting very close to the edge of the abyss.

The German bond auction today was by all reads a disaster with virtually no demand. It appears the crisis is spreading into the core. We could be rapidly approaching the tipping point here. Given all the uncertainty does anyone want to be long with us being closed tomorrow for Thanksgiving and limited trading Friday while Europe continues business as usual?

Being its the day before Thanksgiving the news front is quiet on the corporate side. No news and no upgrades or downgrades. Stock futures here start us down about 100 dow points. Crude is selling off and if the market selloff takes us down to October 4th lows look for brent to head below 100 bucks. The euro is selling off on the German bond disaster. Gold is down which in my view is indicating that someone out there is selling due to stress (major european bank?). The 10 year is at 1.95%. There is potential for it to get ugly as the day wears on.

Tuesday, November 22, 2011


Certainly the drop of 600 points in 4 trading days means the market is entitled to some sort of technical bounce. But there are big headwinds all over the place. Europe which got hit pretty hard yesterday was up earlier but those markets have now turned lower. The GDP figure for Q3 was revised down to 2.0 from 2.5%. The super committee failed which was no surprise. We could go on and on here. Markets are staring into the abyss as all support levels below have been pretty much taken out. So unless we get some market moving headline look for sellers to try to gain the upper hand and fade any rally attempt.

Of course MLP holders continue to enjoy relative comfort as the index closed well off its lows of the day yesterday with a little bit more than a 3 point loss and still above all important support. Legacy Reserves (LGCY) gets an upgrade from Baird this morning to outperform from market perform. Cheniere Energy (LNG) is up a buck in the premarket in active trading as they sign another 20 year LNG deal. Otherwise its a quiet morning on the corporate side.

Stock futures are sinking fast right now after being higher are now lower across the board. Yesterday's intraday lows loom large here. Euro markets have lost their gains and are now lower. The Euro was higher and now it too is heading back to the flatline. Crude is heading back to unchange but nat gas is a few ticks higher on colder weather prospects down the road. MLPS will continue to outperform but at some point if this sell off really starts to get serious, they will be sold. And btw with all the uncertainty in Europe, would you want to be long going into Thanksgiving? Europe is open Thursday while we are shut down. Should be interesting for sure.

Monday, November 21, 2011

MLPS are down with everything over 7 points on the index. This puts the index right into the moving average support zone. So a break below 360 could be ominous here for the group but then again it would be in conjunction with the overall market anyway. The dow is down over 300 points as he head into lunchtime with the S&P and Nasdaq all down sharply and all important support has been taken out on all the averages.

Specifically among mlps, Alliance Resource (ARLP) and Sunoco Logistics (SXL) are both down just under 3 points. We have a long string of mlps which are down between 1 and 2 points. The winners list right now is empty.

Lunchtime has taken us a touch off the lows. It might get really ugly after 1pm.

One of the problems when looking back on any given period of time...say the week before Thanksgiving, or the last quarter of the year for example, it assumes that every year conditions are always pretty much the same. Well folks, this year, it appears that we have put a financial meltdown on the table. Europe continues to circle the drain and we see nothing coming today that indicates that the ECB will step foward and stop their problems. Over the weekend Germany's position of no bailouts for Greece, Italy, Spain, or anyone else. only got harder. The bond market has been successful in overturing another government as Spainish elections have thrown out the socialists. Meanwhile the shock of all shocks was that there was no deal on the budget from the Washington Super duds. So the markets are set to open down sharply lower this morning, More on that later.

Let us, for now suspend the world for awhile and look at mlps. The chart has yet to break down and actually remains locked in this sideways pattern we've been in pretty much since May. Buying down at 320 has been smart. Selling up here around 370 has been also smart. 390 is the all time high which is not that far away. So what puts an end to this lovely little world? If the world does meltdown again ala 2008 than we will see our little group unravel. I would point out that we probably have more people invested in mlps now than we've ever had before. (there are commercials running on CNBC!). Fundamentally the group looks pretty solid so it will give us the chance to gather shares on the cheap again.

Back to the markets note that last week did damage. Starting with the Nasdaq the rising moving average support lines did not hold. The dow chart is the last one to breakdown and will do so at the open this morning. I use fibbonacci based, expotential moving averages, but the simple 50 day moving average which is widely followed sits at 1206 and that goes at the open. The 1200 level might hold for awhile today but ultimately it will go as well.

For the dow industrials that average sits at 11523 and it will probably get there at some point today if the selloff accelerates later today. Note that the dow is the last chart to break down. The broader index charts broke down first and that is not good.
The nasdaq composite which is the most speculative of the indexes was the first to breakdown late last week.
So with the breakdown of all major support i think we can pretty much look to the October 4th bottom for a serious retest of that level. Given everything we are facing right now, the odds of that level holding are shrinking fast especially if Europe unravels.

Okay back to MLPS we have Global Partners (GLP) annoucing a deal this morning that is accretive to earnings. Otherwise its a relatively quiet morning here with no other news and no upgrades or downgrades.

Markets are down pre open as mentioned but a little off the lows of the morning as Europe comes a little off its lows of the day. Crude is down and Brent is down to 106. 100 is critical there. The dollar is stronger pretty much across the board. Nat gas is down a little. No cold air in the US right now to make a difference. Weather patterns may change to colder across the midwest and northeast later next week. Gold is down on the idea that when you need to raise cash you sell what you have. So the open looms on what does not look like a good day ahead.

Friday, November 18, 2011

Open looms..does not look impressive. Look for sellers to arrive for the big test.

Stock futures are higher pre open as we are looking to bounce higher at the start. The bounce began very late in the session yesterday (last 2 minutes..about as late as you can get!) when the dow went from -200 to -134 at the close. Yesterday's close among the major averages saw important trendlines being taken out in the Nasdaq and the S&P 500. The Dow closed right on its uptrend lines. The 50 day moving averages lie just below and i would expect that they will be tested today after whatever bounce we get. And make no mistake folks if they don't hold, look out. Meanwhile the Euro is up over 1 cent this morning so far and i'm beginning to wonder whether the currency market is beginning to bet the the Euro survives as the southern European countries eventually separate themselves or leave completely. A smaller eurozone made up of the Northern Euro countries could send it higher. It has been one of the possibilities put out there but it just adds to the confusion.

MLPS yesterday closed higher and actually have had a pretty good week. The tape here remains firm and i suppose when you have 6% yields in the face of a 2% ten year, money just continues to flow in here. In the end, if we are at the beginning of a move back down to the bottom of the market range (1080-1100) on the S&P, mlps will eventually sell off. I have to be honest folks, i'm getting a little uncomfortable seeing all the attention mlps are getting with CNBC commercials running all day long. There is a much larger contingent of fast money getting in here and you have to wonder what will happen if these holders have to raise cash. Still you have to let the tape tell you the story and for now mlps remain in fairly good shape.

No news on mlps this morning and no upgrades or downgrades. European stocks are mixed this morning but not exactly bouncing. The 10 year is sitting at 2% and up a few ticks. Gold is higher. Oil is nudging up against 100 bucks after being down over 3 bucks yesterday. Keep your eyes on what happens after the open and if the sellers gain the upper hand. And of course the 50 moving averages which sit at 1205 on the S&P 500, 2589 on Nasdaq (nasdaq is 2 ticks below it), the Dow Industrials at 11,507, and the MLP index at 355. Btw Nasdaq was the first to go up through the moving averages and trendlines in the rally and its been the first to move down through those trendlines. So they have been a great leading indicator.

Thursday, November 17, 2011

BTW for the S&P the 50 day moving average is at 1204. If this goes...look out below.
The mlp is down a little over a point here as mlps hold on as the last haven of safety and always in a sell off, it ain't over until they get to us. And it may be awhile before they get to us judging by the tape action. And its a run to cash as gold is down nearly 60 bucks here. They aren't flying into the 10 year as its yield is only down 5 basis points to 1.97%. The October low yield is down around 1.69%.
Market suddenly in free fall collapse mode here down 180 points in a matter of minutes. MLPS were up but have now turned lower. Important support is being taken out rather quickly and the tape is getting extremely heavy. Something big is happening.

It seemed like it should have been a simple thing to do but i guess these things take time. Yesterday's news that Enterprise Products Partners (EPD) and Enbridge Energy (ENB) are going to get a pipeline from Conoco(COP) and reverse the flow of oil so that it moves oil from Cushing Oklahoma to the Gulf of Mexico. Its been the reason why US oil was selling for 25 dollars a barrel less than the world oil price. Now that the US is a net producer of oil for the first time in 20 years, we need to flow oil south to seaports. So US West Texas oil soar 3 dollars yesterday to 103.00 and the spread between US and the world prices has dropped to 8 dollars. It was a distraction however to the Euro obsessed markets who learned yestereday at 3:30pm that...gasp...US Banks might be at risk if Europe doesn't do something soon to stop the contagion. Im sure that piece of news was a shock to anyone living in a hole in the ground.

The move yesterday from 3:30pm to 4pm took the dow down nearly 200 points at the close. So i thought this morning it would be a good time to bring out the longer term charts to see what's going on. If its 2008 all over again note the huge 2 1/2 fold move of the MLP index. The index is not that far off its all time highs near 390. The index has been moving sideways this year between 320 and 390. Is this a long term top being established?

If we see a huge unwind with Europe or some big bank, we could be in for some trouble. MLPS have become a large part of many portfolios and if assets need to be sold, it could be troublesome. 320 is the first line in the sand that needs to hold. Otherwise 270 is right below.
The support levels on the dow are 10,400 which is the October low and 9800 where there is a ton of support. If that one goes its a long way dow to the March 2007 low at 6500. I'm just putting up the numbers in case the world comes to an end. Btw i did reshort again on Tuesday.

Europe of course is the focus this morning as French and Spanish bond auctions did not go well. Euro markets were lower ahead of the auctions and are now seeing new lows on the day. That is taking US stock futures with them. Oil is down today especially Brent North Sea oil which is down over 2 dollars and squeezing the earlier mentioned spread even tighter. Gold is down and the Euro is unchanged. Watch the trading closely today as we are getting close to very important support levels short term. 11,650-11,750 are where the moving averages lie. For the MLP index its within 358-361. For the S&P its between 1225 and 1230 and we could be there at the open. By the way as i type this post, its getting very ugly in Europe.

Tuesday, November 15, 2011


We seem to be on the edge of something big again, one way or the other. The tape feels very weak as we had rally attempts earlier which faded. So for now anyway, the sellers have gotten the upper hand. The Euro is right near 1.35 which is down .0118 cents today. The euro bond markets continue to see rates spiking higher with Italy back over 7%, Spain is well over 6, and France is seeing its spread to Germany blow out to all time highs. The contagion is spreading and markets are going to reach a point where patience comes to an end. I think the last leg that is holding the markets up is this belief that the ECB will be the lender of last resort. The ECB and Germany have said this will not happen. We shall see but i think we are at a place where its going to determine whether we go racing down to the lows of October..or head for the highs of last May.

MLP are down 2 points on the index today but they were up 3 points yesteday on a day the market lost ground. There is action today in one mlp that is down 2.33 as of this post and that is Inergy (NRGY) which put up earnings and guidance which were not helpful. Volumes dropped in a soft propane market.

The stock has been in a strong downtrend for months now and while the lows were made back in early October, the bounce back has been rather anemic. One wonders whether the distribution might be in trouble come next quarter. If that low gets taken out, then the market may be telling you something.

Lunch time with the dow down 40 and off the lows. Nasdaq is flat and the MLP index is off a little less than 2. The tape could go either way this afternoon.