WiserTrader Industries Monthly

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October 2007                          Prescott, Arizona                     Contact Editor

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Contents

• Leading Sectors and Industries
• Industries Rising in Rank
• Industries Falling in Rank
• Lagging Industries
• Top-Down Portfolio                        22% profit on open positions
• Portfolio Sell Stop Settings

Published the 3^rd Tuesday of the month        Subscription is free.

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The new top-down stock portfolio got off to a good start.  Now a month old, more selections can be added while attempting to achieve a more balanced asset allocation.  Criteria for choosing stocks are quite simple.  We look for leading industries in leading sectors and find stocks that show growth in market share, earnings and sales. 

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1.0 Leading Sectors and Industries for October

     Sector and industry rankings are normally 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. 

     We have commented before that a 1-day change of 15% or more in an industry’s index value can be caused by splits, mergers or acquisitions.  Yahoo is aware of the problem.  Two leading industries having this problem now are Independent Oil and Gas and Auto Parts.  So I have decided to rank sectors based on the average of their industry rankings to damp out the effects of noise in the data.

     Sectors rankings based on the average of their industry rankings are listed in Table 1A.

Table 1A

Sector Rank

Rank	Sector	Average Industry Rank
1	Basic Materials	38
2	Technology	78
3	Consumer Noncyclical	90
4	Energy	90
5	Transportation	97
6	Industrial Goods	108
7	Services	121
8	Healthcare	121
9	Utilities	121
10	Financial	124
11	Consumer Cyclical	137
12	Conglomerates	147

     The leading industries for the past month are ranked in Table 1B.  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 1B

Leading Industries

October 16, 2007

Rank [R]	Rank of Change   [C]	(R+C)/2	Industries	Companies	Last Gain	1 wk Ago Gain	1 mo Gain
1	92	47	Nonmetallic Mineral Mining	C's	1.7%	-0.7%	19.0%
2	100	51	Industrial Metals & Minerals	C's	-1.5%	0.5%	15.8%
3	61	32	Personal Computers	C's	0.7%	0.6%	14.4%
4	30	17	Education & Training Services	C's	0.8%	2.9%	14.1%
5	91	48	Internet Information Providers	C's	-1.4%	-1.1%	13.8%
6	114	60	Copper	C's	-2.6%	1.5%	13.8%
7	21	14	Diversified Investments	C's	-2.1%	4.3%	13.7%
8	69	39	Basic Materials Wholesale	C's	-1.7%	1.2%	13.0%
9	2	6	Heavy Construction	C's	-1.9%	1.1%	12.4%
10	14	12	Data Storage Devices	C's	-1.2%	1.4%	11.8%
11	64	38	Business Software & Services	C's	-0.7%	-1.4%	11.7%
12	101	57	Agricultural Chemicals	C's	-0.3%	1.7%	11.5%
13	95	54	Foreign Money Center Banks	C's	-5.1%	-12.3%	10.6%
14	35	25	Drug Delivery	C's	-1.6%	0.4%	10.4%
15	45	30	Computer Peripherals	C's	-1.2%	-0.6%	10.4%
16	98	57	Silver	C's	-2.9%	1.6%	10.2%
17	53	35	Major Integrated Oil & Gas	C's	-0.1%	6.8%	9.9%
18	43	31	Steel & Iron	C's	-2.9%	-2.4%	9.8%
19	82	51	Telecom Services - Foreign	C's	-0.5%	3.0%	9.7%
20	130	75	Music & Video Stores	C's	0.4%	1.5%	9.6%
21	124	73	Technical Services	C's	-1.5%	0.1%	9.6%
22	23	23	Security Software & Services	C's	-0.9%	-1.5%	8.9%
23	46	35	Shipping	C's	-1.4%	-0.5%	8.7%
24	26	25	Wireless Communications	C's	-0.6%	1.0%	8.5%
25	127	76	Gold	C's	-1.3%	3.6%	7.9%
26	34	30	Farm Products	C's	1.2%	2.6%	7.9%
27	1	14	Long Distance Carriers	C's	1.1%	1.2%	7.0%
28	68	48	Asset Management	C's	-1.6%	-2.9%	6.9%
29	25	27	Business Services	C's	-0.8%	-2.3%	6.6%
30	32	31	Beverages - Brewers	C's	-1.2%	-2.6%	6.6%
31	20	26	Rubber & Plastics	C's	-0.5%	-1.0%	6.4%
32	59	46	Internet Software & Services	C's	0.1%	-0.9%	6.3%
33	90	62	Industrial Electrical Equipment	C's	-1.0%	-1.3%	6.3%
34	22	28	Air Services, Other	C's	0.7%	4.8%	6.3%
35	118	77