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Wednesday, September 14, 2011


The daily trading pattern has been a tug of war back and forth. The dow was up 70, then down 100, now up 55 again. The question is whether this is a double or triple bottom formation or is it a bearish flag which will ultimately break down and break down hard. MLPS have been treading water for the most part as they have gone sideways and outperformed the broader tape. Still its hard for me to see a substantial rally with the 10 year still straddling 2%.

MLPS are up a small fraction but lagging the rest of the market which appears to be led by technology. Most mlps are moving fractionally in either directon.


Josef said...

With all due respect, why wouldn't there be a mlp rally with the 10 yr at 2%. There are mlp's out there yielding 3 times 2%. And we're told that these low treasury yields will last for at least 2 years.

joewxman said...

Im having a difficult time with the fact that the yield spread relationship has been basically turned on its head. if we go back to normal spreads, mlps can rally. But is the spread at these levels telling us that there is substantial risk here? I think mlps can continue to relatively outperform but im in fear that yields are headed even lower and that would not be a good thing. There may be somethink lurking around the european corner that we are not seeing.