Sentiment Watch:

• Technically charts on the cusp of breaking down or enjoying a re-rally. My thought is its probably time for a modest rally in the equity markets and that the commodities will tag along.
• Fundamentally, things look very shaky beginning with the financials and moving into every facet of the markets.
• Trading sentiment remains on "buy strength on weaker days", shorten trading times, take profits and forget about fire and forget investments just yet unless your time horizon is 2010+. Regarding longer time horizon items I’ve included a brief update on the upstream MLPs reviewed last October at the end of the post. I still like LINE. 

In Today’s Post:

1. Holdings Watch - added a little HK
2. Commodity Watch - no oil inventory report today due to the MLK holiday
3. Stuff We Care About Today - MLP thoughts
4. Odds & Ends

Holdings Watch: The holdings Wiki Tab is updated.

• $10KP Trade: Added (4) February HK $17.50 Calls (HKBW) added for $1.85 with the stock flat on the day at $17.50. This morning Jefferies cut their price target for HK from $25 to $20 but stuck with their Buy rating. Last week Barclays issued a $38 price target here. Regardless of Wall Street’s "diversity" as to target I continue to expect to see results from the five additional Haynesville Shale wells noted in the December 9 press release as well as two additional Eagle Ford Shale wells and the stock has been acting as well as can be expected during a tough time for the market and the group.

Commodity Watch

Crude Oil: The March contract fell $1.73 to close at $40.84 yesterday with the 12 month strip ending off $2.56 at $48.87. Another weak equity market day (major indexes off 4 to 6%) and a strong dollar (up 1.6% to a 5 week high) were to blame for the drop in crude along with a "pervasive sense" that the recession will be deeper and last longer than thought last Friday, Thursday, Wednesday etc. This morning crude is trading up slightly.

• Reuters Poll Shows Global Oil Demand To Contract 400,000 Bopd. A poll of 10 analysts shows that demand fell 20,000 bopd in 2008 will fall another 400,000 bopd this year as gains from emerging markets can no longer mostly offset lost demand from the developed world.