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Monday, October 17, 2011


We have a pretty busy morning in MLP land with 2 deals to talk about. The first and the one that is up front is the deal of Kinder Morgan (KMI) not to be confused with Kinder Morgan LP (KMP). KMI is buying El Paso (EP) for 21 billion. Now this is having impact on Kinder Morgan (KMP) which pre market is up $1.57 on some volume. Meanwhile El Paso Partners (EPB) is down 1.61 perhaps on the idea that KMI will be selling EPB assets instead of dropping them down into the LP. Kinder Morgan (KMI) is up 1.40 on the deal as the buyer as the purchase is accretive and allows an instant dividend increase and perhaps 12% dividend growth next year and beyond. And dividends are all the rage these days. Its part of the reason why the MLP index is back at the top of the range and above its moving average trendlines. And this deal for Kinder Morgan is a huge bet on the future of natural gas.

Another deal is on the front page this morning. Amerigas (APU) is buying the propane assets from Energy Transfer Partners (ETP) and this means a distribution boost for Amerigas holders. Amerigas is up a fraction on this news.

And we have Atlas Resource Partners (ATLS) is forming a new E&P LP which unit holders will get a piece of. ATLS is up 1.40 on a couple of trades before the open.

As to the overall market which for me is the As The Stomach Turns soap opera being short, we are sitting at the absolute top of the recent range and we are working our way though the moving average resistence lines. The 200 day moving average btw is not shown on this chart but sits at 1234 which i think will be formidable if we get there. This rally has been very impressive on price but extremely lacking on volume. Its as if there is a vacuum right now with few sellers until Europe does something. The dream is that the crisis is over and done and i have to believe that these clowns in the end will do something well short of what the market expects.

No other news and no upgrades or downgrades. Europe is lower this morning and the euro is down. Stock futures are a little lower ahead of the open. Europe continues to drive trading so we will watch them for any clues.

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