#BTFD: ECH

It’s always fun to speculate as to what is driving markets. Trump pulled us out of the Iran deal and the European Union is scrambling to keep it in place. Do they think the deal is effective or do they want to maintain the lucrative market access that lifting the sanctions gave them? Does Trump think he can get a better deal or is he just playing to his base of supporters and can give a rats about actually following through at the negotiation table?

Who knows.

The reality is that the global economy is still chugging along. While the rest of the world may be slowing down a little, the US is showing few signs of taking a breather. There is some rumblings that China has shut down port offices and are not issuing new certificates cargo ships to import various products into China. I’m assuming it’s targeted at US farmers although a lot of other industries are finding themselves caught up as collateral damage.

There are so many storylines out there to try to guess where the market is going to go. Or if you prefer: to guess where other people will guess where the market is going to go.

Instead, stick with a repeatable process: look for uptrends, wait for the pullback, buy once it looks like it is stabilizing, sell when it mean-reverts.

Which brings us to ECH.

2018.05.09 ECH

ECH has been in a strong uptrend for the past couple of years but has spent most of 2018 in a trading range. Trading ranges work for us too. Regardless, price pulled back to the bottom of the range, looked like it caught a bid around $51 and moved up again today. The fun thing to note on today’s price range: it looks like someone forgot to use a limit order and got taken advantage of.

Entered at $51.67. Stop loss is at $48.75 while I’ll hopefully get to take a profit when it tags the 20-day simple moving average.