ETN PH Trade Update

Here is where I left off in the trade (link):

Just observing the price action, you can see that the traders see short term fair value between the two blue lines.  I consider the green line undervalued and the red overvalued in the very short term.  I got my fills in the lower area of the range on the morning push lower and closed out half of my position before the close.  I’ll continue to monitor and update as this trade progresses.

This trade had a favorable outcome in the short term.  I identified my areas of support and resistance and what I felt would be prices that undervalue or overvalue the pricing relationship based on my models.

When the spread came in I took off my position, and now I’m in wait and see mode.  Million dollar question is: Do I keep using the same support numbers that got me into the original trade if it comes back down and gives me a second look?  Maybe, but probably not.  It all depends on the price action of the securities and what the individual stocks are doing.  If we are retesting the 1.20 area and one of the stocks is breaking down a support number or breaking out of previous resistance I will wait and look for another area based on the pricing models and some historical numbers.  Remember, “Every hand’s a winner, and every hand’s a loser…”  it all depends on your time frame and your risk tolerance.

When I first started trading, and a veteran trader answered “maybe”  it drove me crazy, but now I realize this is part of the art of trading.

If you want to check into the history of the trade, here is the original blog post.  I logged the original entry on Twitter here, and here is the exit.  As it stands now, I’m flat in this spread.  I’ll update any new positions I initiate.


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