Green on My Screen on Blue Monday

On days like this, I like to see what is showing up as green on my screen i.e. relative strength. Any names that are not defensive in nature (i.e. utilities) on a day Monday this perk up my interest. I also want to see relative strength in sector - believe it or not, housing was actually holding up well Monday. Just one example.

Here are some interesting outliers that appeared to be up without any news

1. PMC Sierra (PMCS) - I haven't owned this stock since 99/00 but I have been stalking it for the past 7-8 days. It has been green many days when the market is weak, and reports this Thursday along with Riverbed Technology (RVBD). While the chart is not as pretty as Riverbed, it's above all key moving averages and showing nice strength of late. This is an integrated chip company with good exposure to China and is adding exposure to the mobile internet, which frankly might be the only secular growth story in America.
2. Discover Financial (DFS) - hey, I have no shame... if something is working I will go with it, even if defaults are continuing and the American consumer is shot. The stock was up 3-4% Monday after a decent earnings report last week. Resistance is $9.75 which is right where it is at.
3. Neutral Tandem (TNDM) - another smallish cap technology stock that I won't even try to put any logic to the chart. This one dropped from $31 to $24 in 2 sessions, two weeks ago... and now is back at $29. Volatile as heck, but its back to a solid position now.
4. DR Horton (DHI), Ryland (RYL), Pulte Homes (PHM) - the homebuilders
5. Coach (COH) - it seems like retailers are now the inverse gasoline... gasoline up, retailers down. And vice versa. It seems so simplistic, but this appears to be what the PhDs programming the quants have in their code!

As an aside, we pointed out Russia a few weeks ago - it is my least favorite of the BRIC nations, as I believe it to be nothing more than a call option on oil. That said, it was the best performer of the group about a month ago. It's fallen 20% since... technically that is a "bear market" but I don't get caught up in those labels. Just pointing that out, and while I like the other 3 BRIC nations - when these things reverse, they go hard.

As for commodities I really am only watching one name - Freeport McMoran Copper & Gold (FCX); this has become the weapon of choice for HAL9000 and his merry band. But the problem with HAL and friends is they are hot money traders - when they leave the party, they zip out the back door and leave you with the police knocking on the front.

In 4 sessions last week, FCX dropped from $61s to $49s. This is the 50 day moving average, where it sat for a few days before starting a new drop Monday - it gapped down .... it is in the $46s and now is knifing along in a date with the 200 day moving average. And just like that, in literally a fortnight, a perfect chart with nothing to worry about is now threatening to revisit its long term moving average. If that breaks, you know how the story goes.

Now with a day or two more of this, the stock will have gotten oversold very quickly, so HAL will move back in for a day or so of "fast money" profits (and we'll here the cattle call of inflation, the consumer is back, blah blah blah), but it can be a dangerous situation here because those who bought late last week thinking they sat on some nice support found out how quickly lemmings can jump off a cliff together. It's all fun and games until HAL9000 pokes a stick in your eye. You know I have a lot of trapped longs in commodities, so my inkling is to use any bounces as opportunities in this space to short, not go long.