Buy Charts and a Look at Some Utilities

The Daytona 500 was rained out yesterday and is being run tonight. Clearly I will be a bit distracted so just a quick post that is chart heavy for tonight.

Market Operations
This morning's sell off just did not feel like it was going to stick and pretty soon after the open buyers stepped in. After things settled in this morning I opened up 3 new long positions.

WFM (Whole Foods Market)
I usually don't enter into names I see all over Twitter and other places, but the long term 2006 top for WFM is too interesting a spot not to try out here. Click any chart for larger view.:

CTCT (Constant Contact, Inc.)
I saw this one over in the 12631 trading room as worked up by ChessNwine. Tight basing after a breakout over $30, has some room to run higher:

CACI (CACI International Inc.)
I found this idea on a PPT screen. Great buyer interest and stock has moved past the $60 level here:

I still hold BANR but it's putting me to sleep and will cut soon if the stock fails to move.

A mix of names for this week.

When I was doing my screens I noticed a large number of utility stocks making up the accumulation list. Some of these names are seeing buying numbers that are even larger than during the height of the summer doldrums. A couple I found:
NEE

D

There were about 4-5 other names that looked the same in the same sector. This screen tends to show accumulation before price moves. Why are "safe" plays like utilities being bought more aggressive than any time since the summer? I am not sure, but it's worth watching the rest of the week.

Have a good night.

Something to Keep in Mind as 2012 Starts

New England Patriots go down 21-0 in the first quarter. Then they win 49-21. Just unreal. Home field throughout playoffs which is the ONLY way they have a chance at a Superbowl run with that defense they have on the field.

Something to Keep in Mind as 2012 Starts
The last 6 months of 2011 were a mess, not sure another way to describe it. Over that span some correlations really jumped out at me and watching those going forward is a key theme of mine.

In a post I did for the iBC Blogger network I looked at how cigarette company RAI was outperforming the SP 500 over the last 6 months. I remarked that I thought the distance between them on a graph was indicative of the risk on/risk off nature of things. Here is a up to date look of RAI vs the S&P 500 (6 month view):

The same can be seen in the Utilities sector and here is a 6 month comparison for the Utilities ETF XLU versus the S&P 500:

If there is going to be some kind of move up in the general markets, the gap between tobacco/utilities and the SPX will narrow. This does not mean that those safer sectors will drop big, it will just mean that they do not get bid up as hard as other risk is sought out.

Now for the twist that I want you to be aware of.

It's natural and expected that in a move to a more aggressive stance on the market, money will be pulled from defensives and put to chase after other assets. You know the names should that happen and the Nasdaq will lead the charge. The spread in the graphs above will tighten and maybe even cross given a strong enough move.

But one thing is worth watching in this dynamic.

Look to the far right of both graphs above again. Did you look close?

If prices are dropping for BOTH the defensives and the general markets then you have to respect that as a strong signal. In no way has that slight blip been confirmed, but you need to be aware of it.

2011 may be over but it was the year of "Max Pain" as Robert Sinn likes to call it. Should defensives and the markets keep dropping in unison it may get uncomfortable once again.

Added!: Cat update. That small kitty is now bigger than her bed!:

Have a good night.