Wall Street’s newest IPO and darling is Snapchat (SNAP). Investors (I’m using the term lightly here) clamored to get in on the hot new app, which now has a market cap of about $ 31 billion. SNAP was up roughly 70% from its IPO price by early Friday. Not bad returns for a 2-day old “camera” company, as described by its CEO. We have SNAP, it’s crackling, and yet to “pop out”.

In 2016, SNAP lost $500 million on $400 million of revenues, plus it’s currently losing its market share. For those stock market nostalgia fans out there, another camera company named GoPro comes to mind. GPRO was a hot IPO in 2016 that went public at 24, ran to a high of 65 before settling down on Friday to just under 9 bucks. If that action sound magical, it is, but only for short sellers. Regarding SNAP, caveat emptor.

Speaking of crackle and pop: by close of business Friday, the S&P 500 closed on new weekly highs, at 238.34. The national consensus was that Trump’s Capitol Hill speech was his best since assuming his office. There was not much detail, but the presidential tone had even the Washington Post thinking that this could be a positive shift. The markets response after his address was to gap and run to new highs.

Runaway gaps are strong continuation patterns which indicate even more upside. After the runaway gap from the intraday highs set on Wed, the sell-off lasted almost 9 market hours and about 1% in price. This left in place the third runaway gap for the year.

This is not to say that there are not some warning signs, such as a slowing in commercial and luxury real estate markets. The high-end art market is cooling, and another interest rate hike is on the table.

Most of our risk on indicators are showing strength. Flight to safety plays (such as Utilities and Consumer Staples) fared poorly, which is a positive sign. Financials led, and Bio-tech is coming alive, and both are poised to run some more.

To see which indicators are waving a yellow flag, check out this week’s video.

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