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Monday, March 12, 2012


Natural gas continues on its spiral downward and the first initial push to 2.25 seem to have held however we now are there again this morning and looking at the technicals, we are at the point of another breakdown and if it does break below here, we could head to a 1 handle on gas in a big hurry. A seemingly endless supply is not good for producers but it is good for those who move the stuff especially toward markets outside the United States since our policy is to produce cheap energy and export it, rather than use it ourselves.

MLPS have come down to support and in an uptrend the 34 day moving average has held throughout this entire rally phase that began at 320. No sign of that breaking down, at least not yet as we hit that moving average last week and now we are straddling just above it. As long as the market overall holds up, i suspect mlps will also hold up. This morning we have Citigroup cutting the price target on Ferrellgas (FGP) form 16 dollars (where it is now) to 9 dollars so this to me says that Citigroup thinks the distribution is in trouble here. Inergy (NRGY) has already seen its stock price cut in half with its distribution in trouble as the company has already signaled. The stock is making new lows again as it breaks under 17.

No other news this morning. Markets are a little softer ahead of the open. Europe is a little lower. The dollar is higher. Oil and nat gas both lower.

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