WiserTrader Industries Monthly

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November 2007                          Prescott, Arizona                     Contact Editor

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Contents

• Portfolio                                            10.8% net profit
• 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 the focus continues on diversification in the face of a 10% market correction and a declining US dollar.

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1.0 Top-Down Portfolio

     Currently held positions have an average profit of 5.9%.  The gross profit, including closed positions, is 12.95%.  After broker fees, the net profit is 10.8%, as summarized in Table 1A.

Table 1A

Top-Down Portfolio Performance

November 20, 2007

Top-Down Trading in 2007 ($7000 Initial Capital)		% Initial Capital
Closed trades in 2007 =	6
Average Trade Size =	$1,000.00
Total Closed Position Share costs =	$6,000.00
Gross Profit on Closed Positions =	$495.56	7.1%
Number of Open Positions =	3
Cost of Open Positions =	$3,000.00
Gross Profit on Open Positions in 2007 =	$411.26	5.9%
Total Gross Profit =	$906.82	12.95%
Broker Commission ($9.99/trade) =	-$149.85
Subscription Cost to date =	$0.00
Net 2007 Profit After Expenses =	$756.97	10.8%
Cash =	$4,274.91
Current Capital =	$7,756.97

     Stocks that survived the down trend and high volatility from October through November are listed in Table 1B.  VDSI closed below its trailing stop on 10/19/07 for a loss of 12.5%.  SNP closed below its trailing stop on 10/19/07 for a profit of 42.4%.  FCX closed below its trailing stop on 11/19/07 for a loss of 10.2%.  The remaining stocks in the table are moved to a hold because their prices 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
BHP	9/18/07	68.57	11/20/07	72.71	6.0%	Hold	69.86
PBR	9/18/07	70.60	11/20/07	105.00	48.7%	Hold	93.42
BRCD	10/16/07	9.02	11/20/07	7.79	-13.6%	Hold	7.63

     Our last attempt to balance the portfolio involved adding some US stocks in order to equal the number of foreign stocks.  Currently BRCD is the only remaining US stock.  BHP is Australian and PBR is Brazilian.  From Table 3A, the leading sector over the past month has been utilities.  Diversified Utilities is ranked 10^th out of 215 industries in Table 3B.  Of these, Sierra Pacific Resources (SRP) is ranked 2^nd in terms of monthly price increase.  However, its sales growth outpaces other leading companies in its industry.  Therefore SRP is 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
Sierra Pacific Resources (SRP)	2.3%	15.2%	$17.52	0.2%	10.8%	202%

     Bonds, although not as exciting as stocks, offer a measure of safety in a market down turn.  Of the three types, high yield bonds offer the greatest return which in some years rivals the return of the major averages.  With this higher yield comes a slightly greater risk.  Investment grade bonds probably offer the next highest rate of return followed by US Treasuries which are the safest.  If inflation picks up, investors typically exit bonds, unless they are inflation indexed.

     The iShares Lehman TIPS Bond Fund (TIP) is an ETF whose results correspond generally to the price and yield performance of the inflation-protected sector of the United States Treasury market as defined by the Lehman Brothers U.S. TIPS index.  While the yield is only about 3%, one must keep in mind its AAA credit rating.  Year to date the return has been 6.2%.  The expense ratio is 0.2%.  Refer to Table 1D.

     One other area of note is the declining US dollar, particularly compared with the Euro.  Rydex Global Advisors sponsors an ETF called the Currency Shares Euro Trust (FXE).  This ETF effectively allows you to hold Euro dollars and collect a dividend while the US dollar declines.  The expense ratio is 0.4%.  Details are shown in Table 1D. 

Table 1D

ETF Additions

ETF	1 wk % Chg	1 mo % Chg	Average Volume	Yield (%)	Price	Net Asset Value
iShares Lehman TIPS Bond Fund (TIP)	1.1%	2.9%	197,500	3.6%	$105.98	$105.75
Currency Shares Euro Trust (FXE)	1.6%	2.6%	200,500	5.3%	$148.55	$147.82

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 November

     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 are those that have declined the least. 

Table 3A

Sector Rank

Rank	Sector	Average 4-Week % Change	Average Industry Rank
1	Utilities	-0.1%	34
2	Consumer Noncyclical	-1.2%	51
3	Energy	-3.3%	74
4	Basic Materials	-4.6%	92
5	Healthcare	-4.8%	81
6	Consumer Cyclical	-5.4%	95
7	Conglomerates	-5.9%	89
8	Technology	-7.3%	114
9	Services	-7.6%	117
10	Industrial Goods	-8.1%	120
11	Financial	-10.2%	133
12	Transportation	-12.4%	167

     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

November 20, 2007

Rank [R]	Rank of Change   [C]	(R+C)/2	Industries	Companies	Last Gain	1 wk Ago Gain	1 mo Gain
1	106	54	Silver	C's	4.3%	-1.0%	8.6%
2	95	49	Oil & Gas Refining & Marketing	C's	3.3%	-0.3%	6.7%
3	86	45	Tobacco Products, Other	C's	3.2%	4.1%	4.7%
4	72	38	Dairy Products	C's	1.6%	-1.4%	4.4%
5	33	19	Processed & Packaged Goods	C's	0.2%	1.3%	4.3%
6	66	36	Accident & Health Insurance	C's	0.3%	0.3%	4.1%
7	102	55	Application Software	C's	1.2%	0.2%	3.9%
8	44	26	Internet Service Providers	C's	-0.5%	-5.8%	3.9%
9	109	59	Gold	C's	5.4%	-1.1%	3.7%
10	49	30	Diversified Utilities	C's	1.2%	1.6%	3.6%
11	50	31	Drug Stores	C's	0.0%	-1.0%	3.4%
12	39	26	Cleaning Products	C's	1.4%	-0.8%	3.2%
13	28	21	Personal Products	C's	0.6%	1.7%	3.1%
14	26	20	Food - Major Diversified	C's	1.5%	-0.1%	2.5%
15	82	49	Grocery Stores	C's	0.3%	0.2%	2.5%
16	88	52	Cigarettes	C's	0.5%	1.7%	2.2%
17	16	17	Electronic Equipment	C's	1.0%	-1.3%	2.1%
18	114	66	Beverages - Soft Drinks	C's	1.3%	1.4%	2.0%
19	29	24	Hospitals	C's	-0.6%	-3.5%	1.6%
20	21	21	Health Care Plans	C's	0.6%	0.8%	1.6%
21	1	11	Recreational Goods, Other	C's	0.4%	1.4%	1.6%
22	108	65	Telecom Services - Foreign	C's	1.7%	-0.6%	1.0%
23	92	58	Gas Utilities	C's	0.3%	-0.6%	0.9%
24	89	57	Electric Utilities	C's	-2.4%	-2.5%	0.8%
25	132	79	Farm Products	C's	0.6%	-2.0%	0.7%
26	136	81	Nonmetallic Mineral Mining	C's	2.2%	-3.0%	-0.1%
27	23	25	Industrial Equipment & Components	C's	1.2%	-3.4%	-0.1%
28	24	26	Diversified Electronics	C's	-0.2%	-0.9%	-0.1%
29	42	36	Foreign Utilities	C's	0.5%	0.3%	-0.2%
30	165	98	Education & Training Services	C's	-1.4%	-4.2%	-0.5%
31	11	21	Marketing Services	C's	-1.2%	-3.0%	-0.5%
32	34	33	Drug Manufacturers - Other	C's	1.2%	-1.7%	-0.7%
33	103	68	Security & Protection Services	C's	-0.3%	-4.0%	-0.9%
34	4	19	Oil & Gas Drilling & Exploration	C's	3.9%	-0.1%	-0.9%
35	113	74	Steel & Iron	C's	2.0%	-3.5%	-1.0%
36	70	53	Auto Parts Wholesale	C's	0.3%	-5.6%	-1.0%
37	148	93	Agricultural Chemicals	C's	2.0%	-3.0%	-1.2%
38	7	23	Food Wholesale	C's	1.3%	-2.7%	-1.3%
39	74	57	Drugs Wholesale	C's	0.4%	-1.5%	-1.4%
40	9	25	Discount, Variety Stores	C's	-0.6%	-3.6%	-1.5%

     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

November 20, 2007

Rank [R]	Rank of Change   [C]	(R+C)/2	Industries	Companies	Last Gain	1 wk Ago Gain	1 mo Gain
21	1	11	Recreational Goods, Other	C's	0.4%	1.4%	1.6%
57	2	30	Computer Based Systems	C's	0.0%	1.9%	-3.5%
66	3	35	Medical Appliances & Equipment	C's	2.2%	-0.1%	-4.4%
34	4	19	Oil & Gas Drilling & Exploration	C's	3.9%	-0.1%	-0.9%
86	5	46	Healthcare Information Services	C's	2.2%	-0.6%	-5.6%
82	6	44	Apparel Stores	C's	1.6%	-7.4%	-5.4%
38	7	23	Food Wholesale	C's	1.3%	-2.7%	-1.3%
79	8	44	Meat Products	C's	1.4%	-0.5%	-5.3%
40	9	25	Discount, Variety Stores	C's	-0.6%	-3.6%	-1.5%
47	10	29	Regional - Southwest Banks	C's	0.8%	-5.3%	-2.2%
31	11	21	Marketing Services	C's	-1.2%	-3.0%	-0.5%
151	12	82	Sporting Goods Stores	C's	2.7%	-0.8%	-9.9%
90	13	52	Photographic Equipment & Supplies	C's	0.7%	-1.6%	-5.9%
58	15	37	Insurance Brokers	C's	0.0%	-3.9%	-3.6%
43	14	29	Appliances	C's	-0.4%	-5.0%	-1.5%
17	16	17	Electronic Equipment	C's	1.0%	-1.3%	2.1%
48	17	33	Drug Related Products	C's	-0.1%	-2.3%	-2.4%
64	18	41	Toys & Games	C's	1.1%	-4.9%	-4.3%
112	19	66	Home Furnishing Stores	C's	0.6%	-7.5%	-7.3%
116	20	68	Oil & Gas Equipment & Services	C's	2.5%	0.1%	-7.4%
20	21	21	Health Care Plans	C's	0.6%	0.8%	1.6%
42	23	33	Drug Manufacturers - Major	C's	0.3%	-1.8%	-1.5%
27	22	25	Industrial Equipment & Components	C's	1.2%	-3.4%	-0.1%
28	24	26	Diversified Electronics	C's	-0.2%	-0.9%	-0.1%
76	25	51	Medical Laboratories & Research	C's	-0.3%	-0.9%	-5.1%
14	26	20	Food - Major Diversified	C's	1.5%	-0.1%	2.5%
70	27	49	Property & Casualty Insurance	C's	-0.2%	-3.6%	-4.5%
13	28	21	Personal Products	C's	0.6%	1.7%	3.1%
19	29	24	Hospitals	C's	-0.6%	-3.5%	1.6%
124	30	77	Textile - Apparel Footwear & Accessories	C's	0.6%	-3.4%	-7.8%
89	31	60	Conglomerates	C's	0.3%	-2.8%	-5.9%
127	32	80	Confectioners	C's	0.2%	-2.9%	-8.0%
5	33	19	Processed & Packaged Goods	C's	0.2%	1.3%	4.3%
32	34	33	Drug Manufacturers - Other	C's	1.2%	-1.7%	-0.7%
62	35	49	Publishing - Newspapers	C's	-0.4%	-5.0%	-4.2%
98	36	67	Trucks & Other Vehicles	C's	0.4%	-11.6%	-6.4%
46	37	42	Medical Equipment Wholesale	C's	0.1%	-1.2%	-1.9%
74	38	56	Housewares & Accessories	C's	1.0%	-0.9%	-5.0%
12	39	26	Cleaning Products	C's	1.4%	-0.8%	3.2%
56	40	48	Home Health Care	C's	-0.3%	-3.1%	-3.3%

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

November 20, 2007

Rank [R]	Rank of Change   [C]	(R+C)/2	Industries	Companies	Last Gain	1 wk Ago Gain	1 mo Gain
196	176	186	Lodging	C's	-0.7%	-7.0%	-14.1%
68	177	123	Diversified Investments	C's	0.2%	-2.3%	-4.5%
134	178	156	Specialized Health Services	C's	-0.7%	-3.0%	-8.4%
154	179	167	Life Insurance	C's	1.0%	-5.4%	-10.0%
108	180	144	Railroads	C's	0.4%	-3.1%	-7.2%
211	181	196	Major Airlines	C's	-2.8%	-8.0%	-18.2%
106	182	144	Scientific & Technical Instruments	C's	0.1%	0.3%	-6.9%
161	183	172	Broadcasting - Radio	C's	0.2%	-6.9%	-10.3%
198	184	191	Machine Tools & Accessories	C's	-1.2%	-7.9%	-14.3%
163	185	174	Long-Term Care Facilities	C's	-0.4%	-5.0%	-10.4%
144	186	165	Asset Management	C's	0.3%	-5.6%	-9.3%
169	187	178	Semiconductor - Integrated Circuits	C's	-0.5%	-5.1%	-10.9%
193	188	191	Gaming Activities	C's	0.8%	-10.9%	-13.4%
178	189	184	Metal Fabrication	C's	0.4%	-4.5%	-12.5%
212	190	201	Technical & System Software	C's	-0.5%	-6.1%	-18.9%
148	191	170	Broadcasting - TV	C's	-2.2%	-5.6%	-9.6%
135	192	164	Major Integrated Oil & Gas	C's	3.8%	-0.2%	-8.5%
199	194	197	Security Software & Services	C's	0.5%	-4.8%	-14.5%
195	193	194	Toy & Hobby Stores	C's	-1.2%	-12.9%	-13.9%
152	195	174	General Contractors	C's	1.7%	-6.5%	-10.0%
166	196	181	Wholesale, Other	C's	-1.6%	-7.7%	-10.7%
87	197	142	Internet Information Providers	C's	2.7%	-1.6%	-5.8%
146	198	172	Printed Circuit Boards	C's	-1.6%	-7.9%	-9.4%
183	199	191	Heavy Construction	C's	0.5%	-2.3%	-12.8%
132	200	166	Pollution & Treatment Controls	C's	0.5%	-3.1%	-8.3%
192	201	197	Residential Construction	C's	-3.5%	-13.7%	-13.4%
207	202	205	Manufactured Housing	C's	1.0%	-10.2%	-17.0%
176	203	190	Regional Airlines	C's	-2.4%	-7.7%	-12.3%
189	204	197	Recreational Vehicles	C's	-3.4%	-10.4%	-13.2%
136	205	171	Computer Peripherals	C's	1.5%	-3.4%	-8.6%
202	206	204	Industrial Equipment Wholesale	C's	0.7%	-6.6%	-14.9%
160	207	184	Air Services, Other	C's	0.6%	-4.1%	-10.3%
184	208	196	Industrial Metals & Minerals	C's	2.8%	-3.9%	-13.0%
213	209	211	Shipping	C's	-0.7%	-10.3%	-19.0%
200	210	205	Basic Materials Wholesale	C's	-2.3%	-6.4%	-14.8%
147	211	179	Personal Computers	C's	1.7%	-2.6%	-9.6%
201	212	207	Copper	C's	0.5%	-5.6%	-14.9%
205	213	209	Data Storage Devices	C's	-1.7%	-5.1%	-16.4%
208	214	211	Music & Video Stores	C's	-1.1%	-6.7%	-17.1%
203	215	209	Medical Practitioners	C's	0.3%	-1.7%	-15.4%

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

November 20, 2007

Rank [R]	Rank of Change   [C]	(R+C)/2	Industries	Companies	Last Gain	1 wk Ago Gain	1 mo Gain
176	203	190	Regional Airlines	C's	-2.4%	-7.7%	-12.3%
177	144	161	REIT - Office	C's	-2.2%	-10.2%	-12.4%
178	189	184	Metal Fabrication	C's	0.4%	-4.5%	-12.5%
179	159	169	Trucking	C's	-0.8%	-8.3%	-12.5%
180	137	159	Semiconductor Equipment & Materials	C's	0.0%	-3.8%	-12.5%
181	94	138	Money Center Banks	C's	-0.2%	-8.6%	-12.6%
182	127	155	REIT - Residential	C's	-1.9%	-8.4%	-12.8%
183	199	191	Heavy Construction	C's	0.5%	-2.3%	-12.8%
184	208	196	Industrial Metals & Minerals	C's	2.8%	-3.9%	-13.0%
185	83	134	CATV Systems	C's	-0.4%	-2.3%	-13.0%
186	84	135	Credit Services	C's	-0.7%	-7.2%	-13.1%
187	131	159	Department Stores	C's	1.1%	-8.3%	-13.1%
188	158	173	Sporting Activities	C's	-1.3%	-8.6%	-13.2%
189	204	197	Recreational Vehicles	C's	-3.4%	-10.4%	-13.2%
190	104	147	Semiconductor- Memory Chips	C's	-2.1%	-9.6%	-13.2%
191	140	166	Jewelry Stores	C's	2.5%	-6.9%	-13.3%
192	201	197	Residential Construction	C's	-3.5%	-13.7%	-13.4%
193	188	191	Gaming Activities	C's	0.8%	-10.9%	-13.4%
194	135	165	Catalog & Mail Order Houses	C's	0.6%	-2.0%	-13.7%
195	194	195	Toy & Hobby Stores	C's	-1.2%	-12.9%	-13.9%
196	176	186	Lodging	C's	-0.7%	-7.0%	-14.1%
197	111	154	Building Materials Wholesale	C's	-1.4%	-5.8%	-14.2%
198	184	191	Machine Tools & Accessories	C's	-1.2%	-7.9%	-14.3%
199	193	196	Security Software & Services	C's	0.5%	-4.8%	-14.5%
200	210	205	Basic Materials Wholesale	C's	-2.3%	-6.4%	-14.8%
201	212	207	Copper	C's	0.5%	-5.6%	-14.9%
202	206	204	Industrial Equipment Wholesale	C's	0.7%	-6.6%	-14.9%
203	215	209	Medical Practitioners	C's	0.3%	-1.7%	-15.4%
204	150	177	Rental & Leasing Services	C's	1.3%	-9.6%	-16.2%
205	213	209	Data Storage Devices	C's	-1.7%	-5.1%	-16.4%
206	157	182	REIT - Hotel/Motel	C's	-1.4%	-8.0%	-16.9%
207	202	205	Manufactured Housing	C's	1.0%	-10.2%	-17.0%
208	214	211	Music & Video Stores	C's	-1.1%	-6.7%	-17.1%
209	138	174	Office Supplies	C's	-2.1%	-9.6%	-17.4%
210	117	164	Savings & Loans	C's	-1.2%	-9.7%	-18.1%
211	181	196	Major Airlines	C's	-2.8%	-8.0%	-18.2%
212	190	201	Technical & System Software	C's	-0.5%	-6.1%	-18.9%
213	209	211	Shipping	C's	-0.7%	-10.3%	-19.0%
214	121	168	Surety & Title Insurance	C's	-0.9%	-10.4%	-27.6%
215	124	170	Mortgage Investment	C's	-21.2%	-35.6%	-44.7%

FIGURE 4

     It is important to remember that the usefulness of industry ranking depends on how each industry is actually performing.  When the market performs poorly, the leading industry could very well be the one that declines the least, as is the case for many over the past month.  An industry could be doing nothing price wise but could end up near the top or bottom of the ranking list because other industries might be doing extremely poorly or well.  There is not enough information in an industry’s ranking alone to infer how the industry index has actually changed over time.  There is no substitute for looking at the actual percentage change of an index for the industry of interest.  For the past month, most industries have declined.

     Industry rankings based on rank position changes indicate future industry leadership.  This indicator also confirms how well a leading industry is maintaining its position. 

    The spreadsheet from which the charts and tables were obtained is available as a free download.  It is named the “industries” spreadsheet and is obtained by clicking on the Excel Files link.  The industries spreadsheet gives you performance values for all 215 industries on a single page.  The “companies” spreadsheet, used to view performance of all the companies in an industry, is downloaded from the same web page.  XLQPlus is required. 

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- Market Data -      Tables and charts in this newsletter are produced from Excel spreadsheets where data is automatically retrieved from online portals, formatted, copied and pasted as presented. This is made possible with . . . XLQPlus      Live market data is continuously updated into Excel to create up to date market indicators.  Free spreadsheets are available to get you started.  XLQPlus is recommended by The Oxford Club, Investment U e-letter and The American Association of Individual Investors.  It is simple to install. Download 45-day free evaluation. Order 1-year license $119

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