Winning Sector of 2011 Still Making New Highs

Stocks closed mixed in light trading yesterday, as the low-volume rally that began on Thursday ground to a halt. A rise in crude oil to over $100 a barrel was blamed for the lack of enthusiasm. But a focus on defensive issues and special situations indicates a loss of interest in continuing a broad advance during the shortened trading week.

Even the lack of bad news fromEuropeand a significant rise in the Consumer Confidence Index for December failed to draw in many buyers. The index rose to 64.5 from 56; it was expected to rise to just 58.

At the close, the Dow Jones Industrial Average fell 3 points to 12,291, the S&P 500 rose less than a point to 1,265, and the Nasdaq rose 7 points to 2,625. The NYSE traded 494 million shares and the Nasdaq crossed 200 million. Breadth was even on both exchanges.

The conservative Dow Jones Utility Average received scant attention from the media throughout the year, as they focused on the wild swings generated by European contagion and other more exciting topics.

But even as the dangerous European situation created unprecedented volatility in the world�s markets, the utility stocks plodded on. By yesterday�s close, �the index for widows and orphans� had gained over 15% since the year�s start. That, coupled with an average dividend rate of about 3%, made the utilities the winning sector of the year.

Yesterday, even as the year is grinding to a close, the Dow Jones Utility Average broke from the top of its bullish channel and made a new high for the year, while The Wall Street Journal was praising the S&P 500 for just breaking even. To be fair, the Journal was comparing the performance of U.S. stocks to underperforming European markets and even such former high-flyers as the Tokyo and Shanghai benchmark indices.

Unlike the utility stocks, gold had a wild ride losing 16% since August while still achieving a 12% gain for the year. The new year could begin with another rush after key commodities like oil, gold and other hard assets.

If so, the reversal from the SPDR Gold Shares (NYSE:GLD) support line may be hinting that a new bottom is forming. However, in order for the bottom to have substance, it must hold its December low and close above the 200-day moving average at $158.

If you�re looking for fast profits in the new year, my colleague Joe Burns just closed a BIDU trade for a 158% profit, a FSLR trade for 143.75%, and a GOOG trade for 80%. Get in on his new trades now.