The good news is that The Alerian MLP Index is up 22% in less than three weeks. The bad news is that it’s merely round-tripped over the last six to a level that represented a four-year low in early August.

The big volume seen during the late September plunge and subsequent recovery is consistent with at least a short-term capitulation. Just don’t expect the comeback trail to head straight up as producers continue to retrench amid stubbornly low energy prices.

Production volumes that have held up surprisingly well this year are likely to head south soon, taking a bite out of midstream revenue in the process. Fortunately, declining U.S. output should boost energy prices, which will likely exert a bigger influence on MLP valuations.

Targa Resources’ (NYSE: TRGP) early forecast for 2016, covered in the last MLP Investing Insider, pointed to an earnings yield of perhaps 8% next year, combining the general partner’s dividend and the affiliated MLP’s distributions.

A tax-deferred and fully covered yield like that at the bottom of the commodity cycle should prove plenty rewarding when that cycle turns.

Investors who bought last year’s highs in MLP land certainly can’t be happy with their returns to date. But you still have to be impressed with how most of the top midstream MLPs have performed, continuing to increase distributions and cutting costs to maintain a decent coverage cushion.

This month’s In Focus quotes an investing legend at length on the hazards of evaluating a long-term profit stream based on the market’s daily moods and short-term price trends. The people who were selling MLPs on Sept. 29 could have used the reminder.

Energy Transfer Equity (NYSE: ETE) founder Kelcy Warren also plays a patient game, and he’ll need a lot of patience to profitably absorb Williams (WMB) if the merger between the two midstream giants closes as expected next spring. Right now, WMB is selling at a modest discount to ETE, and makes for a more attractive way to invest in the combination of the two companies. For more on this, see Best Buys.

We’re less excited about the midstream opportunities in the Bakken, where new pipelines have arrived just as most of the rigs have been mothballed. Midstream operators in North Dakota will also need patience aplenty as production declines and competition intensifies, as colleague Robert Rapier reports in Sector Spotlight after touring the region.

The very serious threat of low energy prices and looming production declines has at least put into proper perspective the more remote and selective threat of the proposed changes in the range of activities qualifying for MLP tax treatment. The Internal Revenue Service has already started to backtrack a bit under industry pressure. Still, some rule revisions are likely. For details, see News and Notes.

I’m very encouraged by last month’s panic selling. While no one enjoys losing money even on paper, the midstream profit streams continue largely unimpeded, and can now be purchased at promising discounts. That’s hardly a risk-free proposition amid a major energy downturn. But there’s a lot less risk in buying today than there was a year ago, so long as you are prepared not to over-react to the daily noise.