Trader's Daily Notebook: Apple's Chart Looks Really Good

 | Aug 07, 2017 | 7:00 AM EDT
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Friday's nonfarm employment report, despite coming in better than expected, failed to trigger any meaningful increase in index-related volatility.

For the day, the E-Mini S&P 500 futures (Es) traded roughly 865,000 contracts over an 8.5-handle range. Roughly in line with what we've seen in these past couple of weeks, but certainly not what we were hoping for, given the morning's pre-market economic data.

S&P 500 Futures -- Daily Volume Profile

As far as the major index ETFs are concerned, the iShares Russell 2000 Index ETF (IWM) was the week's big loser, declining around 1.25%. The PowerShares QQQ Trust (QQQ) lost 0.13%, while the SPDR S&P 500 Trust (SPY) gained 0.2%. Suffice it to say it was a pretty quiet week as far as most indices were concerned.

On an individual stock basis, names like Tesla (TSLA) , Action Alerts PLUS charity portfolio holding Apple (AAPL) and CF Industries (CF) all had a great week. Of the three, I like Apple's chart the most, and would look to begin trading it on the long side above $160.

As far as the week's biggest losers are concerned, names like Range Resources (RRC) , Viacom (VIAB) , Mylan (MYL) , Cardinal Health (CAH) , Noble Energy (NBL) and Fluor Corp (FLR) all suffered double-digit declines. And as you probably noticed, all these names are centered around the energy, media and medical distribution sectors.

If you pull up a chart of any of last week's biggest losers, I believe you'll agree none of them had particularly attractive charts prior to their most recent decline. Put another way, even a basic appreciation for technicals should have kept you away from these stocks (provided you're a short or intermediate timeframe trader).

The bottom line is, while volatility has been extraordinarily limited in the Es and SPY, there are still trading opportunities. You've just got to be a bit more persistent and creative to find them.

Moving on to Monday's Es auction, we should begin by noting that 70% of last week's regular session trading (the value area) occurred between 2468.75 and 2473.75. Now, rather than dwell on how crummy a five-handle week-long value area is, let's focus our energy on catching a sustained break outside that range.

We'll begin the week with a focus on 2475.75, or two-handles above last week's value area high, and 2468.50. Value migration outside that 7.25-handle range, as hard as it may be to believe, will have us looking for immediate range extension.

S&P 500 Futures -- 15-Min Volume Profile

A sustained trade above 2475.75 encourages buyers to make a run for 2480 and new contract highs, while value migration beneath 2468.50 opens the door to a quick test of 2463.25. For shorter timeframe traders, we need to see the session close beneath 2463.25 before considering a flip to a more bearish posture.

Any trading or volume profile related questions can be posted in the comments section below, emailed to me at or posted to my twitter feed @ByrneRWS.

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