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Wednesday, July 25, 2012


It was a wonderful run for mlps that took the index from 360 to 400 in short order and an upswing of 16 out of 17 days. But 400 has been a wall again and the chart does have the look of a triple top in the making. However notice that I linked these 3 charts as they continue to drive trading so far this summer.

First off MLPS have run higher since the last days of Q4 and I believe it is part of this massive pile on into anything that has attractive yield. Notice also while all this has been happening the Dow Industrials and for that matter all the broader averages have been essentially moving along a trend line which btw is bordered on the bottom by the 200 day moving average (not shown). And all this is going on in the face of the 10 year which broke below its April low of 1.46 and took a trip down to 1.36%, The bond market is clearly screaming deflation and markets may be starting to take notice. MLPS probably were able to sustain this tailwind but it is very disturbing to see all these downside divergences on the tape. Even some defensive stocks are beginning to show some wear. The selling in the last 2 days is probably overdue but we are about a week away from the quarterly ex distribution process. I wonder who is going to be left to buy once that process works its course. Its another 3 months until the next payout.

Sorry for the scant posts lately but work has been heavy with lots of overtime and its hard to sit in front of computer screen and write this blog while you spend 55 to 60 hrs a week in front of another computer screen. See my latest post on btw where I've been posting weekly.

Wednesday, July 18, 2012


In case you have been just way to busy trying to stay cool in a pool, ocean, or endless beer, mlps have staged a pretty remarkable rally here which began just before the end of the second quarter. We are up 12 of the last 13 days and there is no sign that anyone want to sell in here, particularly since the quarterly results will becoming out soon and most mlps will step foward and announce their usually 2% quarter to quarter increases in payouts. Since we live in a world where dividends and distribtuions are everything, getting 6% cash against a 10 year under 1.50% certainly looks and feels pretty good. Just exactly what the implications are longer term in my view can't be good. But it seems that as bearish as i have been lately, the overall market has just managed to pull back just enough to make you nervous but not enough to make u panic.

Earnings from the big boys, Kinder Morgan Partners (KMP) and Enterprise Products (EPD) will be out soon and those stocks are near 52 week highs. Certainly its a vote of confidence to see these mlps rallying back and the index is nearing 400 again. At least for now buyers are in control.

Tuesday, July 10, 2012


Up again yesterday and up again this morning but the overall tape has turned lower as Europe and Italy are hitting headlines about tapping aid. The dow is up 10 points after being up 90 and down 30. MLPS are up nearly 2 points on the index and 390 is getting close. The 10 year is at 1.51% and is not far from its all time lows in yield. Right now (or at least since i disappeared for 10 days) mlps are moving counter to the tape. Natgas coming back to 3 bucks is probably also giving support.

Watch the tape to see what happens this afternoon.

Monday, July 09, 2012


I guess is should stay away more often! MLPS have staged a nice rally. They have cleared their declining moving averages and are up 8 straight days. The markets seem to be keyed on that 10 year rate which is now back down close to its all time low of 1.45% It is trading at 1.51% right now. Spreads remain stubboringly high at around 500 basis points but i guess the market is okay with mlps at these levels, providied the rest of the market does begin a serious circling of the drain.

And while i was away natural gas has been rallying smartly as well and traded above 3 dollars for the first time since January. When it it 3.06 on Friday sellers came in and took it down to 2.79. Nat gas is up today so this rally probably has more upside to it. Perhaps we may be getting into a new rage of 2.50-3.00 in nat gas which at least means that a floor in prices could be in.

 Still this chart has the looks of a longer term complex bottom in nat gas prices and i think the level to watch is still 3.00. A close above this with volume could mean a longer term bottom is in place.

MLPS right now are flat on the day with the dow down about 60 points. Markets seem to be a little softer but with not much conviction. The euro is rallying which is letting crude climb above 85 bucks although energy stocks dont seem to be following suit.