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Tuesday, February 21, 2012


The winter of discontent weather wise is in Europe with snow and bitter cold while the US experiences the opposite pretty much coast to coast. As far as markets go all are happy these days with the US markets the happiest and the march to 3 year highs on the dow, 11 year highs on Nasdaq, and all time highs on the mlp index continues.

At least with regards to the MLP index there is still no sign of a top and we are at 408 on the index as we begin a holiday shortened week. Point and figure charts have been bullish for months and have an upside target on the index at 475 which is another 20% higher from here. The key for mlps will be the 10 year rate which is at 2% this morning. If the 10 year begins a march higher then i would look for some pressure to come into mlp prices but so far the 10 year has not been able to break above 2% for any long period of time. 2.40% was the high back on October 24th 2011 and until that breaks, rates are probably stuck in a range which will be good for the group.

The dow chart meanwhile is doing its own adventure as it breaks above its 2011 high and heads for 13000 which is where it sits this morning. Futures are still pointing to a slightly higher open and we should see markets attempt to take that level out. Markets overall continue to take out every important level of resistance and i'm not sure what stands in the way of new all time highs all the way around. Still there is stress out there. Crude over 120 on Brent and gasoline approaching 5 dollars a gallon in California and 4 bucks here in NY are going to put the pressure on soon enough. But its okay because the government keeps telling us that unemployment is dropping and there is no inflation. The other technical stress on the chart for me is volume which continues to indicate that the same dollars are just being moved around the table.

In corporate news Williams Partners (WPZ) and Cabot Oil (COG) are forming a hub for nat gas in the northeast. Nat gas is still well under 3 bucks so why not while its cheap. We are only going to ship it overseas because we can't use it here. Otherwise its a quiet Tuesday morning with no other headlines and no upgrades or downgrades.

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