ChartSmarter Tuesday Game Plan 3/15/16

Markets took a pause Monday before the Fed meeting starts Tuesday and the announcement comes Wednesday. The acronym Merger Monday did return today with HOT and TFM receiving interest. It is good to see that action as value is seen in some of these names with TFM receiving a nice premium up 24%. The days flat action also has to be viewed in a bullish light as the S&P 500 and Dow spoon their 200 day SMAs. To see some digestion after very sharp upward moves seems prudent. The benchmarks for the time being seem to be leaving a lot of dust in their trails with the likes of Demark and Gundlach not participating. If one takes a look at the weekly charts of the S&P 500 and Nasdaq the charts have the look of bullish double bottoms with plenty of upside. The lack of breadth argument has quieted down and one has to look to the action of the financials. Last week the XLF completed its first 4 week winning streak since the summer of 2014 and perhaps they are giving the indication that interest rates may be on the move higher. Of course with the abundance of developed nations now sporting negative yields domestic government debt looks very attractive. Even corporate debt looks glamorous, one just has to look at the LQD rapidly building the right side of a cup base and its chart now sports a golden cross with the 50 day SMA climbing above the 200 day SMA. More intriguing to me was that the indexes shrugged off a weak oil session. Some plays that investors might want to keep an eye on alluding to our earlier finnies strenghtening play would be those that benefit from an overall stronger crude price. Canadian banks fit that bill. Stocks like TD or BMO have run far, more than their American counterparts and look for them to put on handles in their current cup patterns. Equities that transport crude could benefit as well. Below is the chart of CSX that we profiled in our Tuesday 3/8 Game Plan.