The S&P 500 continues to climb the wall of worry.  The index is ignoring what is happening in the world as it makes new highs.  But it is vulnerable and will the markets sell the Trump rally after the inauguration?  The NDX, which was the laggard has made another all time high and the chart is very strong.  It is in a solid up trending channel and trading about mid channel.  The Russel 2000 (IWM is the ETF) has been in a period of consolidation since early December after its huge move off of the November lows.  It has formed a orderly descending channel approaching the lower end of the longer term up trending channel. If the bigger markets continue to go, we could see the IWM spike from this level as lots of the lower priced stocks last week had big moves. One thing to note is that the financial sector is super strong.  With earnings starting to come out, this may be the catalyst that leads to a melt up in the market from this level.

The Dow Transportation index was very strong up until the end of the year.  It now appears to be in wave 4 of a 5 wave pattern as it consolidates its gains.  It appears that it may be at the start of wave 5 as it trades above the consolidation channel.  And many of the stocks that make up the Tranny have already started to move.

 The semiconductor sector (SMH) continues to be strong.  It is near lateral support and trading at the lower edge of the strong up trending channel.  It has been forming a descending wedge and if there is a melt up in the markets, expect this sector to be one of the leaders.  

The biotechs (LABU) really are not showing too much direction in here though it is a positive chart structure.  They need to break above the short term resistance that developed last week.  It may consolidate in here for awhile longer.

Gold (GDX) has recently traded above the descending top line and consolidating for the last few weeks.  As well the moving averages have turned up and crossed.  This is a very bullish chart pattern.  JNUG and NUGT both look the same.  

Oil stocks (USO) are building a very strong base pattern forming an ascending triangle.  But it is getting ahead of itself I think.  Oil, itself is not quite showing the same strength.  So I am cautious with the oil sector stocks.

AKAO: Stock was a nice winner off my watch list on Thursday trading up as high as $18.25 closing at $17.96.  The stock has broken out above the spike high from December closing near the top of its range.  It is a very strong chart with big volume on up days and lower volume on down days.  And, as announced, the Baker Brothers have taken a 13% position.  I would look to go long this stock over $18.25 with price target of $19.50 and then $25.00.

AXGN: Stock is in a strong up trending channel.  It has been consolidating for 4 months and last week broke out above resistance at around $10.00.  It is now flagging and looks to go higher with a break above $10.50.  Price target is $12.00.  Shorts, 8 days to cover.  It is a low volume trader though, so not for everyone.

AXTI: Stock is in a strong up trending channel having just bounced off the lower trend line and through the descending tops line.  On Friday it broke through lateral resistance and closed right at it at $6.00.  I would look to go long over $6.20 with $6.75 as the first target and then $8.00.

CARA: Stock is trading at the bottom of the up trending channel having recently broke through short term resistance at $11.00 trading as high as $11.58 and closing $11.42.  I would look to go long this stock over $11.60 with the first target of $13.00 (which was the recent high) and then $15.00.  Shorts 4.1 days to cover.

CNAT: Stock gapped up from its base at $2.50 and traded as high as $6.30 before forming a wedge over the last 4 weeks.  On Friday it did have a small move to the up side from that wedge but with low volume.  It needs to break the declining tops line with conviction with an entry level around $5.50.  Price target would be $6.30 and then $7.00.

CRNT: Stock is in an up trending channel and has been consolidating the last 4 months.  Last week, it broke out of the trading range when it touched the lower edge of the up trending channel line.  It traded as high as $3.87 and has been trading sideways the last 4 days closing Friday at $3.64.  I would look to go long over $3.64 and adding to the position above $3.87 with a price target of $5.00.

EMKR: A very strong chart pattern for this stock.  It gapped up from its long term base at $6.75 trading as high as $9.47.  Over the last 2 months it has made an orderly pull back.  Last week it broke through the declining tops line and traded up to the former high (making a nominal new high at $9.50). I would look to go long this stock over $9.50 with $12.00 as my price target.

HDSN: Strong chart for this stock after it gapped up off its $4.00 base back in July.  It is trading at the lower edge line of the up trending channel and is making an ascending triangle.  A move above the triple top of $8.47 and I would look to go long.  Price target of $10.00.

KEM: Stock broke out from its $3.75 base back in mid November.  Since then it traded up to a high of $7.00 before consolidating the last 6 weeks.  On Friday it broke out above resistance at $7.00 and traded as high as $7.18, closing $7.12.  I would look to go long over $7.20 with $8.15 as my price target.  

SGYP: After its recent move up, it has been forming a wedge pattern closing on Friday at $6.73.  I would watch to see it break through the declining tops line and trade above the recent high of $6.88.  I have a price target of $7.75.  Shorts, 4.1 days to cover.