Wall Street set for flat open; Apple to begin at record high

Summary:

• US stock markets called to open broadly flat
• Monday saw a steady day of gains
• Apple set for record open; Not far from $1T valuation

As attention turns to the US session the morning’s trade in Europe has been quite interesting with the DE30 and SPA35 enjoying solid gains, while the ITA40 has come under pressure once more and the UK100 is in the red after GBP rose on the UK services data. As we look to the forthcoming Wall Street open it is interesting to utilise the "sessions" function on xStation and observe how the US500.cash has performed in recent days during US market hours. 

 The first and last hours trade during the US session can often provide a good indication of what may lie ahead for the US500.cash. Source: xStation

What is quite obvious is that the two most important hours of trade are the first and last, with both of these often setting the tone going ahead. If we look back to last Tuesday (29th May) we can observe a large bullish H1 candle into the cash close and this provided a timely signal that the sell-off was over. More recently the first hours trade has been a good indicator for what is to follow with Thursday’s red H1 candle providing a forewarning of the declines while Friday and Monday both saw decent gains after bright starts. 

Looking at the US100.cash which has been the best performing of all large cap indices of late, it is interesting to view the internals more closely. The market has moved within 25 ticks of its record high of 7192 this morning and scrutinising the number of stocks at 52 week highs and the number of stocks that showing overbought conditions (as defined by an RSI above 70) reveals some interesting findings. 

 The internals of the Nasdaq 100 (US100 on xStation) reveals some interesting contrasts between now and January - when the record high was set. Source: xStation

Back in January when the record peak was set, there were 40 of the 100 stocks at 52-week highs compared to just 18 yesterday. It’s a similar story as far as having an RSI above 70 is concerned with only 19 currently in overbought territory compared to more than 40 at the start of the year. What this shows is that less stocks are doing the heavy lifting as far as the index is concerned, with the breadth nowhere near as high as it was back in January. 

During the month of May 45% of the gains seen in the broader S&P500 index were due to FAANG stocks and yesterday saw Apple post a new record high. The move into uncharted territory has rekindled talk of Apple being the world’s first $1T company, with price needing to gain just over $10 a share to reach the landmark figure.

 Shares in Apple hit a new record peak yesterday and are not far from equating to a $1T valuation. Source: xStation

Shares are called to open at their highest ever level this afternoon around $192 which would give a market value of $943B. A move to $203.47 (which is only approximately 6% above there) would see the market cap hit the big $1T mark and notch what would be a no doubt momentous milestone.