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Friday, January 27, 2012


In a time when MLPS have been the stars of the market, one mlp diverged from that pattern and began selling off back in May and has been almost been cut in half. Inergy (NRGY) this morning announced its distribution (which had no increase) but more importantly is what the company said in the press release.

"management and the board of directors of Inergy are evaluating a reset of the quarterly distribution to a level that is supportable by the cash flow expected to be generated from Inergy’s businesses in the near term."

Reset means a cut. In the mlp world the one commandment is thou shall not cut the payout. And when you look at the stock price haircut, the market is telling us that the reset may be rather large.

Also moving down this morning by 2 points is Kinder Morgan Partners (KMP) which was on its way to 90 bucks when we get this technical note from Carter Worth who tells us that Kinder Morgan technically is trading at an unsustainable level. The stock is taking a 2 point hit and we now have the mlp index down almost 5 and under the 400 market on the index. Looks like a long overdue pullback is occuring in mlps. As long as the overall trends remain in place however any pullback is a another buying opportunity.

Markets overall reversed yesterday and this morning we are a little lower on a soft GDP number. The tape still holds a positive undertone to it and until we see a decisive move downward, the uptrend remains intact. Volume however remains a sticking point in this rally as it continues to spiral downward. At some point that might matter but we are still not at that particular point.

Sorry for the lack of posts this week but sometimes this stuff does burn you out a bit.

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