WiserTrader Industries Monthly

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December 2007                          Prescott, Arizona                     Contact Editor

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Contents

• Portfolio                                                      8% net capital gain
• Sell Stop Settings
• Leading Sectors and Industries
• Industries Rising in Rank
• Industries Falling in Rank
• Lagging Industries

Published the 3^rd Tuesday of the month        Subscription

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Top-down stock selections are based on finding leading industries in leading sectors with stocks that show growth in market share, earnings and sales.  In this issue two new stocks are added to the portfolio with help from the Dow Jones industry classification system. 

. . .  Have a pleasant holiday season and a prosperous new year . . .

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1.0 Top-Down Portfolio

     Currently held positions have an average profit of 5.8%.  The gross profit, including closed positions, is 10.88%.  After broker fees, the net profit is 8.0%, as summarized in Table 1A.

Table 1A

Top-Down Portfolio Performance

December 18, 2007

Top-Down Trading in 2007 ($7000 Initial Capital)		% Initial Capital
Closed trades in 2007 =	8
Average Trade Size =	$1,000.00
Total Closed Position Share costs =	$8,000.00
Gross Profit on Closed Positions =	$352.36	5.0%
Number of Open Positions =	4
Cost of Open Positions =	$4,000.00
Gross Profit on Open Positions in 2007 =	$408.95	5.8%
Total Gross Profit =	$761.31	10.88%
Broker Commission ($9.99/trade) =	-$199.80
Subscription Cost to date =	$0.00
Net 2007 Profit After Expenses =	$561.51	8.0%
Cash =	$3,202.90
Current Capital =	$7,561.51

     Stocks that survived two successive down trends and high volatility from October through December are listed in Table 1B.  BHP and BRCD closed below their sell stop prices on 11/21 for a 1.9% gain and a 16.2% loss, respectively.  PBR is moved to a hold because its price declined by more than half the trailing stop percentage.  Refer to Section 2 for current trailing stop settings.

Table 1B

Top-Down Portfolio

November 20, 2007

Stock	Open Date	2007 Open Price	Last Date	Last Price	2007 Gross P/L (%)	Status	Sell stop
PBR	9/18/07	70.60	12/18/07	104.34	47.8%	Hold	93.42
SRP	11/20/07	17.52	12/18/07	16.93	-3.4%	Buy	14.20
TIP	11/20/07	105.87	12/18/07	105.20	-0.6%	Buy	85.98
FXE	11/20/07	148.55	12/18/07	144.25	-2.9%	Buy	119.05

     PBR is a Brazilian stock and SRP is a US stock.  TIP is an inflation-protected US Treasury ETF and FXE is a currency ETF for the Euro.  From Table 3A, the leading sectors over the past month have been basic materials and energy, according to the Yahoo.com classification.  However, Yahoo.com did not update a number of industries last week, forcing us to treat the regular industry tables with a grain of salt. 

     According to the Dow Jones classification system, Coal was the leading industry over the past month followed by Consumer Electronics.  Coal is listed as Industrial Metals and Minerals in the Yahoo system and is ranked 20^th overall and second in terms of industries that are fastest rising in rank.  For this industry Consol Energy, Inc (CNX) stands out as a leading company due to its size, market share and recent price performance.  These factors make up for its lack of growth in sales and earnings. 

     Consumer electronics is listed as Electronics Stores in the Yahoo system where it is ranked 2^nd overall.  For this industry, Best Buy Co. Inc. (BBY) was selected.

     CNX and BBY are being added to the portfolio.  Details are listed in Table 1C.

Table 1C

Stock Addition

Company	1 wk % Chg	1 mo % Chg	Price	Mkt. Share Increase	Sales Growth	Earnings Growth
Consol Energy, Inc (CNX)	8.7%	34.0%	$67.25	-0.7%	-2.5%	-29.7%
Best Buy Co. Inc. (BBY)	1.3%	10.9%	$51.62	1.9%	16.5%	22.7%

2.0 Portfolio Sell Stop Settings

     When a stock’s price declines from its highest price by half the trailing stop percentage, its status is moved to a hold.  Hold status means continue to hold it but don’t add to the position.

Trailing stop percentage (Tsp) for WiserTrader portfolios

     1. When the stock price remains within 20% of the buy price,

· Tsp = -20%.

     2. When the stock price is greater than 20% of the buy price,

· Tsp is the wider of  -20% or

 , a negative percentage.

o f is the fraction of gains given back,

§ Bullish, f = 0.5 as when S&P 500 is above its SMA 30

§ Cautious, f = 0.333 as when S&P 500 is below its SMA 30

§ Bearish, f = 0.25 as when S&P 500 SMA 30 slope turns negative

o P_BUY is the buy price and

o P_MAX is the maximum price reached.

 3. The sell stop price P_SELL is,

Current Status:  Bearish,  f = 0.25

The S&P 500 is currently below its SMA 30. 

The S&P 500 SMA 30 slope is currently negative. 

    These settings are designed at worst to, (1) take a 20% loss, (2) break even when there is a 20% maximum gain and (3) walk away with at least half of the gain greater than 20%.  At the same time the stock price is given room to vary.  Deviations from these settings are possible.

3.0 Leading Sectors and Industries for December

     Sector and industry rankings are determined by the percent increase in industry composite index values over the previous 4 weeks.  Industry rank ranges from a high of 1 to a low of 215 based on a list of 215 industries in the Yahoo Finance industry classification system.  Sectors rankings based on the average of their industry rankings are listed in Table 3A.  The best performing sectors this month were basic materials and energy. 

Table 3A

Sector Rank

Rank	Sector	Average 4-Week % Change	Average Industry Rank
1	Basic Materials	3.5%	68
2	Energy	2.3%	83
3	Industrial Goods	1.5%	93
4	Consumer Noncyclical	1.4%	94
5	Technology	1.1%	102
6	Consumer Cyclical	0.8%	107
7	Utilities	0.3%	118
8	Healthcare	0.3%	100
9	Financial	0.0%	121
10	Services	-0.2%	123
11	Conglomerates	-0.4%	137
12	Transportation	-0.6%	118

     The leading industries for the past month are ranked in Table 3B.  The leftmost column is the rank based on the previous 4-week percentage change.  The second column from the left is ranked by the number of positions an industry is above or below its 4-week average rank.  The third column from the left is the average of the first two columns.  Clicking on the industry name takes you to an industry summary page.  The “C’s” will display the companies in the industry.  The last three columns on the right are the percentage gains for the previous trading day, the previous week and the previous four weeks.

 Table 3B

Leading Industries

December 18, 2007

Rank [R]	Rank of Change   [C]	(R+C)/2	Industries	Companies	Last Gain	1 wk Ago Gain	1 mo Gain
1	32	17	Nonmetallic Mineral Mining	C's	-1.1%	-0.8%	14.1%
2	74	38	Electronics Stores	C's	1.7%	1.2%	9.7%
3	61	32	Agricultural Chemicals	C's	-0.8%	-2.4%	9.0%
4	48	26	Investment Brokerage - Regional	C's	1.2%	-1.8%	8.9%
5	81	43	Farm Products	C's	0.2%	3.2%	8.6%
6	52	29	Semiconductor - Specialized	C's	2.2%	0.6%	8.1%
7	1	4	General Contractors	C's	2.3%	-0.4%	8.0%
8	97	53	Internet Service Providers	C's	3.8%	-3.0%	7.8%
9	10	10	Metal Fabrication	C's	0.8%	-3.2%	7.7%
10	15	13	Beverages - Brewers	C's	0.8%	0.2%	7.6%
11	44	28	Catalog & Mail Order Houses	C's	1.0%	-2.0%	7.5%
12	26	19	Regional - Southeast Banks	C's	1.5%	0.7%	7.2%
13	103	58	Cleaning Products	C's	0.9%	0.4%	6.9%
14	25	20	Chemicals - Major Diversified	C's	0.8%	-0.4%	6.8%
15	65	40	Auto Dealerships	C's	0.6%	-0.1%	6.8%
16	47	32	Steel & Iron	C's	2.1%	-2.4%	6.1%
17	22	20	Specialty Chemicals	C's	1.0%	-1.0%	6.1%
18	14	16	Heavy Construction	C's	0.5%	-4.1%	6.0%
19	102	61	Discount, Variety Stores	C's	1.0%	-1.5%	5.9%
20	2	11	Industrial Metals & Minerals	C's	1.9%	-2.2%	5.9%
21	98	60	Foreign Money Center Banks	C's	1.9%	-13.7%	5.8%
22	92	57	Photographic Equipment & Supplies	C's	-1.0%	-1.1%	5.8%
23	113	68	Tobacco Products, Other	C's	0.8%	0.7%	5.8%
24	45	35	Technical Services	C's	1.1%	-1.9%	5.8%
25	46	36	Air Delivery & Freight Services	C's	0.7%	0.0%	5.7%
26	29	28	Personal Computers	C's	-0.2%	-2.4%	5.4%
27	9	18	Broadcasting - Radio	C's	2.7%	1.1%	5.4%
28	132	80	Hospitals	C's	1.0%	-2.2%	5.4%
29	33	31	Regional - Mid-Atlantic Banks	C's	0.8%	-0.1%	5.2%
30	16	23	Asset Management	C's	0.9%	-0.4%	5.0%
32	56	44	Regional - Southwest Banks	C's	2.4%	1.5%	5.0%
31	20	26	Drugs - Generic	C's	0.8%	-1.2%	5.0%
33	24	29	Building Materials Wholesale	C's	1.6%	-3.6%	4.9%
34	23	29	General Building Materials	C's	1.5%	1.9%	4.8%
35	42	39	Diversified Computer Systems	C's	0.9%	-0.9%	4.7%
36	58	47	Internet Information Providers	C's	0.8%	-3.8%	4.7%
37	93	65	Medical Appliances & Equipment	C's	0.4%	-1.2%	4.6%
38	149	94	Recreational Goods, Other	C's	2.8%	-2.5%	4.6%
39	57	48	Management Services	C's	1.7%	1.4%	4.5%
40	6	23	Technical & System Software	C's	0.7%	-3.3%	4.5%

     The top 20 leading industries are plotted in Figure 1.

FIGURE 1

4.0 Industries Rising in Rank

     Table 4A contains the industries that are moving up in position the fastest.  The 20 fastest rising in rank are plotted in Figure 2.

 Table 4A

Industries Advancing in Rank the Fastest

December 18, 2007

Rank [R]	Rank of Change   [C]	(R+C)/2	Industries	Companies	Last Gain	1 wk Ago Gain	1 mo Gain
7	1	4	General Contractors	C's	2.3%	-0.4%	8.0%
20	2	11	Industrial Metals & Minerals	C's	1.9%	-2.2%	5.9%
96	3	50	Mortgage Investment	C's	4.8%	3.5%	1.3%
60	4	32	Recreational Vehicles	C's	1.5%	1.8%	3.4%
72	5	39	Shipping	C's	1.6%	-2.7%	2.7%
40	6	23	Technical & System Software	C's	0.7%	-3.3%	4.5%
68	7	38	Industrial Equipment Wholesale	C's	1.1%	-3.0%	2.9%
73	8	41	Trucks & Other Vehicles	C's	2.8%	-2.5%	2.7%
27	9	18	Broadcasting - Radio	C's	2.7%	1.1%	5.4%
9	10	10	Metal Fabrication	C's	0.8%	-3.2%	7.7%
61	11	36	Publishing - Periodicals	C's	-0.2%	1.8%	3.3%
47	12	30	Property Management	C's	0.0%	-1.2%	4.3%
116	13	65	Music & Video Stores	C's	4.2%	2.5%	0.6%
18	14	16	Heavy Construction	C's	0.5%	-4.1%	6.0%
10	15	13	Beverages - Brewers	C's	0.8%	0.2%	7.6%
30	16	23	Asset Management	C's	0.9%	-0.4%	5.0%
118	17	68	Real Estate Development	C's	3.8%	4.8%	0.6%
92	18	55	Machine Tools & Accessories	C's	0.5%	-2.2%	1.4%
58	19	39	Synthetics	C's	1.9%	-1.0%	3.5%
31	20	26	Drugs - Generic	C's	0.8%	-1.2%	5.0%
70	21	46	Semiconductor - Integrated Circuits	C's	2.0%	-1.0%	2.8%
17	22	20	Specialty Chemicals	C's	1.0%	-1.0%	6.1%
34	23	29	General Building Materials	C's	1.5%	1.9%	4.8%
33	24	29	Building Materials Wholesale	C's	1.6%	-3.6%	4.9%
14	25	20	Chemicals - Major Diversified	C's	0.8%	-0.4%	6.8%
12	26	19	Regional - Southeast Banks	C's	1.5%	0.7%	7.2%
78	27	53	Staffing & Outsourcing Services	C's	1.2%	-1.0%	2.3%
124	29	77	Gaming Activities	C's	1.3%	-2.5%	0.1%
26	28	27	Personal Computers	C's	-0.2%	-2.4%	5.4%
44	30	37	Auto Manufacturers - Major	C's	1.2%	-0.3%	4.4%
88	31	60	Long-Term Care Facilities	C's	2.7%	-0.7%	1.7%
1	32	17	Nonmetallic Mineral Mining	C's	-1.1%	-0.8%	14.1%
29	33	31	Regional - Mid-Atlantic Banks	C's	0.8%	-0.1%	5.2%
126	34	80	Auto Parts	C's	0.8%	-0.7%	0.0%
43	35	39	Trucking	C's	0.3%	-3.1%	4.5%
63	36	50	Major Integrated Oil & Gas	C's	1.2%	-2.0%	3.3%
79	37	58	Medical Practitioners	C's	1.8%	0.5%	2.2%
54	38	46	Independent Oil & Gas	C's	1.9%	-1.4%	3.7%
109	39	74	Credit Services	C's	0.5%	-0.4%	0.9%
56	40	48	Aerospace/Defense - Major Diversified	C's	0.0%	-1.2%	3.6%

FIGURE 2

5.0 Industries Falling in Rank

     A list of the industries declining in rank the fastest is given in Table 5A.  The 20 fastest declining in rank are plotted in Figure 3.

 Table 5A

Industries Declining in Rank the Fastest

December 18, 2007

Rank [R]	Rank of Change   [C]	(R+C)/2	Industries	Companies	Last Gain	1 wk Ago Gain	1 mo Gain
105	176	141	Grocery Stores	C's	0.5%	-0.1%	1.0%
65	177	121	Cigarettes	C's	-0.1%	-1.0%	3.1%
108	178	143	Property & Casualty Insurance	C's	0.8%	-4.0%	0.9%
156	179	168	Sporting Goods	C's	1.0%	-2.4%	-1.5%
144	180	162	Diversified Machinery	C's	0.8%	-4.8%	-0.7%
177	181	179	Regional - Pacific Banks	C's	1.1%	-3.9%	-3.0%
138	182	160	Information & Delivery Services	C's	-0.4%	-2.4%	-0.4%
167	183	175	Sporting Goods Stores	C's	1.4%	-4.4%	-2.3%
201	184	193	Small Tools & Accessories	C's	1.4%	-5.9%	-6.5%
171	185	178	Specialty Retail, Other	C's	1.1%	-4.7%	-2.3%
193	186	190	Computers Wholesale	C's	0.8%	-2.6%	-4.3%
183	187	185	Surety & Title Insurance	C's	1.7%	-7.8%	-3.4%
181	188	185	Diversified Communication Services	C's	1.2%	-2.0%	-3.1%
212	189	201	Major Airlines	C's	-0.4%	-12.2%	-11.5%
195	190	193	Business Equipment	C's	0.7%	-3.1%	-5.3%
182	192	187	Investment Brokerage - National	C's	-1.9%	-4.0%	-3.3%
164	194	179	Farm & Construction Machinery	C's	-0.1%	-3.2%	-2.1%
188	191	190	Specialized Health Services	C's	1.4%	-2.9%	-3.9%
121	195	158	Textile - Apparel Footwear & Accessories	C's	-0.4%	-4.3%	0.5%
101	193	147	Medical Laboratories & Research	C's	0.6%	-1.3%	1.1%
132	196	164	Gas Utilities	C's	0.3%	-0.9%	-0.2%
162	197	180	Insurance Brokers	C's	0.7%	-1.8%	-1.9%
184	198	191	Processing Systems & Products	C's	0.7%	-0.9%	-3.5%
175	199	187	Biotechnology	C's	0.3%	-1.8%	-2.9%
154	200	177	Regional - Northeast Banks	C's	0.8%	-1.6%	-1.1%
160	201	181	Beverages - Soft Drinks	C's	0.1%	-1.6%	-1.8%
208	202	205	Auto Parts Wholesale	C's	1.2%	0.7%	-9.5%
110	203	157	Food - Major Diversified	C's	1.3%	-2.3%	0.9%
186	204	195	Drug Stores	C's	0.6%	0.1%	-3.6%
131	205	168	Marketing Services	C's	1.5%	-0.7%	-0.2%
214	206	210	Silver	C's	2.2%	-9.2%	-12.2%
155	207	181	Confectioners	C's	1.6%	-2.4%	-1.3%
199	208	204	REIT - Industrial	C's	0.2%	-6.4%	-6.3%
125	209	167	Processed & Packaged Goods	C's	0.3%	-0.3%	0.1%
140	210	175	Accident & Health Insurance	C's	0.5%	0.3%	-0.5%
127	211	169	Personal Products	C's	-0.5%	-1.2%	0.0%
174	212	193	REIT - Healthcare Facilities	C's	0.8%	-6.0%	-2.6%
173	213	193	Foreign Utilities	C's	0.6%	-4.9%	-2.6%
194	214	204	Computer Based Systems	C's	1.7%	-4.3%	-5.0%
215	215	215	Drug Manufacturers - Other	C's	0.8%	-18.8%	-13.1%

FIGURE 3

6.0 Lagging Industries

     Lagging industries for the past month are listed in Table 6A.  A chart showing the rank performance of the 20 worst ranked is shown in Figure 4.

 Table 6A

Lagging Industries

December 18, 2007

Rank [R]	Rank of Change   [C]	(R+C)/2	Industries	Companies	Last Gain	1 wk Ago Gain	1 mo Gain
176	136	156	Advertising Agencies	C's	0.7%	-1.7%	-2.9%
177	181	179	Regional - Pacific Banks	C's	1.1%	-3.9%	-3.0%
178	174	176	Communication Equipment	C's	0.1%	-3.0%	-3.0%
179	126	153	REIT - Office	C's	1.8%	-4.3%	-3.1%
180	154	167	Resorts & Casinos	C's	-1.8%	-4.7%	-3.1%
181	188	185	Diversified Communication Services	C's	1.2%	-2.0%	-3.1%
182	191	187	Investment Brokerage - National	C's	-1.9%	-4.0%	-3.3%
183	187	185	Surety & Title Insurance	C's	1.7%	-7.8%	-3.4%
184	198	191	Processing Systems & Products	C's	0.7%	-0.9%	-3.5%
185	83	134	Rental & Leasing Services	C's	-0.2%	-2.9%	-3.6%
186	204	195	Drug Stores	C's	0.6%	0.1%	-3.6%
187	115	151	Networking & Communication Devices	C's	0.6%	-0.2%	-3.7%
189	193	191	Specialized Health Services	C's	1.4%	-2.9%	-3.9%
190	134	162	Medical Equipment Wholesale	C's	1.8%	-0.1%	-3.9%
188	127	158	Air Services, Other	C's	0.6%	-4.3%	-3.9%
191	162	177	Home Improvement Stores	C's	1.7%	-5.0%	-3.9%
192	172	182	Paper & Paper Products	C's	0.9%	-4.6%	-4.0%
193	186	190	Computers Wholesale	C's	0.8%	-2.6%	-4.3%
194	214	204	Computer Based Systems	C's	1.7%	-4.3%	-5.0%
195	190	193	Business Equipment	C's	0.7%	-3.1%	-5.3%
196	160	178	REIT - Residential	C's	2.1%	-5.4%	-5.3%
197	128	163	REIT - Hotel/Motel	C's	1.4%	-6.3%	-5.6%
198	101	150	Jewelry Stores	C's	2.5%	-0.7%	-6.1%
199	208	204	REIT - Industrial	C's	0.2%	-6.4%	-6.3%
200	99	150	Semiconductor- Memory Chips	C's	-0.9%	-6.1%	-6.3%
201	184	193