Industry Rankings for September

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Top down stock picking based on sector and industry rankings should be supplemented with additional fundamental and chart analysis. Using a small amount of additional information, this issue begins building a new portfolio.

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1.0 Leading Sectors and Industries

Sector and industry rankings are determined by the percent increase in industry index prices 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.

The leading sectors, based on their past month’s performance, are listed in Table 1A.

Table 1A

Sector Rank

Rank	Sector	1 Month
1	Basic Materials	13.9%
2	Energy	11.6%
3	Consumer Non-cyclical	8.1%
4	Conglomerates	7.1%
5	Transportation	6.7%
6	Utilities	6.0%
7	Technology	5.2%
8	Services	4.8%
9	Healthcare	3.7%
10	Financial	3.5%
11	Consumer Cyclical	3.3%
12	Industrial Goods	3.3%

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.

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. It has been explained to Yahoo that index values should be recalculated as the 4^th root of the combined company market cap on each page access. Yahoo has agreed to implement the solution but it may take some time. Two leading industries having this problem are Beverages-Brewers and Wireless Communication. A lagging industry having the problem is Diversified Communications Services. These three industries should be discounted.

Table 1B

Leading Industries

September 18, 2007

Rank [R]	Rank of Change [C]	(R+C)/2	Industries	Companies	Last Gain	1 wk Ago Gain	1 mo Gain
1	7	4	Beverages - Brewers	C's	2.3%	36.1%	42.5%
2	56	29	Wireless Communications	C's	3.1%	19.9%	27.9%
3	10	7	Gold	C's	4.3%	5.7%	25.2%
4	11	8	Copper	C's	5.1%	8.4%	24.8%
5	96	51	Resorts & Casinos	C's	3.2%	9.6%	22.0%
6	20	13	Industrial Metals & Minerals	C's	6.2%	4.6%	20.4%
7	24	16	Major Airlines	C's	4.6%	2.3%	18.4%
8	82	45	Music & Video Stores	C's	5.0%	10.4%	17.6%
9	21	15	Oil & Gas Refining & Marketing	C's	3.7%	4.8%	17.0%
10	103	57	Sporting Goods Stores	C's	4.1%	6.7%	16.9%
11	79	45	Technical Services	C's	3.8%	6.0%	16.1%
12	62	37	Nonmetallic Mineral Mining	C's	3.5%	2.6%	15.8%
13	1	7	Silver	C's	3.0%	0.9%	14.7%
14	25	20	Independent Oil & Gas	C's	3.6%	5.8%	14.3%
15	28	22	Air Services, Other	C's	2.3%	2.6%	14.1%
16	87	52	Agricultural Chemicals	C's	3.1%	5.4%	14.0%
17	64	41	Oil & Gas Equipment & Services	C's	3.4%	3.6%	13.8%
18	46	32	Catalog & Mail Order Houses	C's	2.0%	3.7%	12.9%
19	123	71	REIT - Healthcare Facilities	C's	2.1%	6.5%	12.5%
20	39	30	Steel & Iron	C's	7.0%	-6.0%	12.1%
21	108	65	Dairy Products	C's	1.4%	0.2%	11.6%
22	26	24	Jewelry Stores	C's	4.1%	5.3%	11.4%
23	120	72	Internet Service Providers	C's	2.9%	6.0%	10.9%
24	137	81	Recreational Goods, Other	C's	4.2%	1.3%	10.7%
25	16	21	Closed-End Fund - Foreign	C's	2.8%	3.3%	10.7%
26	57	42	Personal Computers	C's	2.2%	2.9%	10.6%
27	34	31	Major Integrated Oil & Gas	C's	3.4%	4.5%	10.5%
28	30	29	Synthetics	C's	4.0%	4.6%	10.4%
29	14	22	Metal Fabrication	C's	6.0%	5.0%	10.4%
30	49	40	Broadcasting - Radio	C's	1.4%	2.0%	10.2%
31	53	42	Farm Products	C's	1.7%	0.6%	10.1%
32	65	49	Telecom Services - Foreign	C's	4.0%	4.0%	9.7%
33	36	35	Home Improvement Stores	C's	3.1%	4.9%	9.6%
34	45	40	Toys & Games	C's