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Tuesday, June 05, 2012


The 2 charts above pretty much tell the story in mlp land and its not a pretty one right now with the index breaking down 8 points yesterday and approaching 350. Support to me on a weekly basis is somewhere around 320 which is where mlps bottomed last August. There seems to be no support here and the index won't be helped today with Kinder Morgan (KMP) doing a secondary and the stock down about 1.70 points at the open. It is particulary distressing to see yield spreads in mlps blowing out a bit here. The spread on Kinder Morgan is a little under 500 basis points and that is awfully high if markets were behaving well. Now we are no where near some of the spreads we saw back in 2008 where those spreads blew out to double digits in many individual cases. But being up at these levels is something we need to pay attention to especially if Europe begins to really circling the drain.

The market indexes are trying to hold here at the open with the mlp index drawing a line in the sand here at 350 and most issues in the group save for Kinder Morgan are moving fractionally in either direction.

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