WiserTrader Industries Monthly

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August 2008                          Prescott, Arizona                     Contact Editor

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Contents

• Portfolio
• Trailing Stop Settings
• Leading Sectors and Industries
• Industries Rising in Rank
• Industries Falling in Rank
• Lagging Industries

Published the 3^rd week of the month     

Subscription to Weekly Newsletter

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Top-down stock selections are based on  leading sectors with a focus on stocks that pay dividends and show growth in market share, earnings and sales.    

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1.0 Top-Down Portfolio

     The portfolio is shown in Table 1A.  Gross P/L excludes dividends.

Table 1A

Top-Down Portfolio

Top - Down Portfolio Open Positions						As of Market close on		8/20/08
Stock	Begin Date	Begin Price	Last Date	Last Price	Gross P/L (%)	Status	Sell stop	Metrics	Indicated Dividend
TIP	12/31/07	102.13	8/20/08	106.69	4.5%	Buy	86.97	Defensive	5.9%
Trailing Stop Settings are Bullish							Tspi (long) = -20%
Net capital for 2008 =			-20.5%				f (long) = 50%

Note: Gross P/L excludes dividends. 

Current Holdings:

iShares Lehman TIPS Bond (NYSE: TIP) is an inflation-protected US Treasury ETF.  Dividends are paid monthly.  While the indicated annual dividend is 5.9%, the amount for August was paid at an annual rate of 10.57%. 

Table 1B

Closed Positions

Top - Down Portfolio Closed Positions						As of Market close on		7/15/08
Stock	Begin Date	Begin Price	Last Date	Last Price	Gross P/L (%)	Status	Sell stop	Metrics
CNX	12/31/07	71.52	1/4/08	65.48	-8.4%	closed	66.22	Growth
BBY	12/31/07	52.51	1/4/08	47.48	-9.6%	closed	48.04	Growth
PBR	12/31/07	115.24	1/16/08	98.09	-14.9%	closed	106.93	Growth
SRP	12/31/07	16.98	1/22/08	14.90	-12.2%	closed	15.28	Defensive
CPD	1/16/08	17.00	1/28/08	15.27	-10.2%	closed	15.30	Defensive
ACH	2/19/08	45.26	3/6/08	45.71	1.0%	closed	46.91	Growth
POT	2/19/08	152.50	3/10/08	143.03	-6.2%	closed	147.85	Growth
BHP	2/19/08	72.66	3/10/08	66.16	-8.9%	closed	68.18	Growth
NFLX	3/18/08	35.00	4/22/08	30.00	-14.3%	closed	32.56	Growth
FXE	12/31/07	146.40	5/1/08	154.66	5.6%	closed	128.08	Defensive
FXA	2/19/08	92.34	5/1/08	93.49	1.2%	closed	76.40	Defensive
FXF	3/18/08	99.85	5/1/08	95.16	-4.7%	closed	80.90	Defensive
FXY	3/18/08	100.30	5/1/08	95.50	-4.8%	closed	80.70	Defensive
IYE	4/15/08	138.54	5/1/08	139.32	0.6%	closed	117.42	Growth
OIH	4/15/08	190.73	5/1/08	191.77	0.5%	closed	166.13	Growth
USO	4/15/08	91.44	5/1/08	90.38	-1.2%	closed	76.55	Growth
MOS	6/17/08	161.08	6/24/08	142.98	-11.2%	closed	144.97	Growth
TRA	6/17/08	55.10	6/25/08	48.87	-11.3%	closed	49.59	Growth
X	5/20/08	184.02	7/2/08	153.40	-16.6%	closed	172.76	Growth
AGU	6/17/08	110.99	7/2/08	99.75	-10.1%	closed	101.21	Growth
IYE	5/20/08	155.25	7/9/08	138.11	-11.0%	closed	139.73	Growth
OIH	5/20/08	218.22	7/9/08	200.46	-8.1%	closed	201.79	Growth
USO	5/20/08	104.30	7/17/08	105.53	1.2%	closed	105.73	Growth
AMED	7/15/08	57.36	8/13/08	52.32	-8.8%	closed	52.86	Growth

     The overall performance is shown in Table 1C.

Table 1C

Top-Down Portfolio Performance

Top-Down Trading in 2008 ($9809.07 Initial Capital)		% Initial Capital
Closed trades in 2008 =	24
Average Trade Size =	$1,000.00
Total Closed Position Share costs =	$24,000.00
Gross Profit on Closed Positions =	-$1,625.22	-16.57%
Number of Open Positions =	1
Cost of Open Positions =	$1,000.00
Gross Profit on Open Positions in 2008 =	$42.79	0.44%
Total Gross Profit =	-$1,582.43	-16.13%
Broker Commission ($9.99/trade) =	-$429.57
Subscription Cost to date =	$0.00
Net 2008 Profit After Expenses =	-$2,012.00	-20.51%
Cash =	$7,183.85
Current Capital =	$7,797.07	8/20/08

     The market has moved sideways for the past month.  Figure 1A is a snap shot of trading at mid day on 8/20/08.  Sectors are ranked in Table 1D.

FIGURE 1A

Table 1D

Sector Rank

Rank	Sector	Last	1 wk	1 mo
1	Healthcare	-0.1%	-0.2%	2.5%
2	Services	0.4%	-2.2%	2.4%
3	Technology	1.0%	-1.9%	1.7%
4	Consumer Noncyclical	-0.2%	-1.8%	1.1%
5	Consumer Cyclical	0.1%	-2.9%	0.7%
6	Conglomerates	0.1%	-3.1%	0.5%
7	Utilities	-0.2%	0.4%	-1.2%
8	Industrial Goods	0.3%	-2.0%	-1.5%
9	Transportation	0.0%	-2.5%	-3.1%
10	Financial	0.2%	-3.6%	-4.2%
11	Energy	2.0%	0.9%	-8.4%
12	Basic Materials	1.3%	0.5%	-13.1%
	Average	0.4%	-1.5%	-1.9%

New Additions:

     This month’s selections are from the healthcare and services sectors. 

Johnson & Johnson (NYSE: JNJ) engages in the research and development, manufacture, and sale of various products in the health care field worldwide.  The indicated dividend is 1.8% with an ex-dividend date of 8/22/08 and a payout date of 9/9/08.

Casey's General Stores Inc. (NASDAQ: CASY) operate convenience stores under the Casey's General Stores' name in the Midwest states.  The indicated dividend is 0.3% with an ex-dividend date of 7/30/08 and a payout date of 8/15/08.

2.0 Portfolio Trailing Stop Settings

          Updated 4/21/08 –

The trailing stop percentage T_SP for WiserTrader portfolios is described below.  When stocks are bought in a bullish market, an initial trailing stop percentage T_SPI = -20% is just about right.  However, the market can change.  A -20% trailing stop is too wide when the market turns bearish and a -10% trailing stop is too narrow when the market is bullish.  Also, there is the feeling that when profits grow beyond a certain level, say 65%, a stock should have a progressively wider trailing stop.  So a 65% profit acts as a new transition point.  These considerations are described graphically in Figure 2A for long positions.  The lines indicate the T_SP for bullish, cautious and bearish market conditions.

FIGURE 2A

1. When the maximum percentage profit P_MAX% is less than 65%, the initial trailing stop percentage T_SPi is a fixed value that depends on market conditions.  For a long position,

· Bullish, T_SPi = -20%, as when the S&P 500 is above its SMA 30

· Cautious, T_SPi = -15%,  as when the S&P 500 is below its SMA 30

· Bearish, T_SPi = -10%, as when the S&P 500 SMA 30 slope is negative

     2. For a long position, when P_MAX%  is 65% or more greater than the buy price,

· T_SP varies according to,

o f is the fraction of gains placed at risk,

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

§ Cautious, f = 0.375,  as when the S&P 500 is below its SMA 30

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

o P_MAX% = (P_MAX  - P_BUY) / P_BUY

o P_MAX is the maximum price reached and

o P_BUY is the buy price

Note: The signs for T_SP and T_SPi are negative for long positions and positive for short positions.  For short positions the maximum price reached is replaced by the minimum price reached.

 3. The sell stop price P_SELL is,

Current Settings:  Bullish

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

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

	S&P > SMA30 SMA30 slope >0		S&P < SMA30 SMA30 slope >0		S&P < SMA30 SMA30 slope <0		S&P > SMA30 SMA30 slope <0
	Bullish	Bullish	Cautious	Cautious	Bearish	Bearish	Bearish	Cautious
	Long	Short	Long	Short	Long	Short	Long	Short
TSPi	-20%	10%	-15%	15%	-10%	20%	-10%	15%
f	0.5	0.25	0.375	0.375	0.25	0.5	0.25	0.375

    The 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 a 65% or greater maximum gain.  At the same time the stock price is given room to vary.  Deviations from these settings for individual stocks are possible when their industry undergoes unusual activity. 

     If you follow these portfolios, keep in mind that they are only benchmarks which can not be matched exactly because of the round numbers used.  Entry prices are taken from the previous close and exit prices are taken from the close on the day that trailing stops are triggered.  You can either sell as soon as a trailing stop is triggered or wait until after the close and try to get better prices over the next few days.  Once out of a position, a stock is set aside for a period of about two months. 

3.0 Leading Industries

     The leading industries for the past month are ranked in Table 3A.  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 3A

Leading Industries

Rank [R]	Rank of Change   [C]	(R+C)/2	Industries	Companies	Last Gain	1 wk Gain	1 mo Gain
1	10	6	Manufactured Housing	C's	-1.1%	0.8%	22.5%
2	34	18	Surety & Title Insurance	C's	-2.0%	9.2%	16.4%
3	49	26	Consumer Services	C's	1.9%	2.1%	16.1%
4	95	50	Health Care Plans	C's	-1.3%	-2.6%	15.2%
5	4	5	Long-Term Care Facilities	C's	-0.7%	0.0%	12.6%
6	55	31	Medical Practitioners	C's	-1.3%	-2.7%	12.0%
7	37	22	Home Improvement Stores	C's	1.7%	-3.6%	11.2%
8	22	15	Electronics Stores	C's	-0.7%	-0.9%	10.9%
9	33	21	Personal Products	C's	-0.8%	0.6%	10.8%
10	16	13	Networking & Communication Devices	C's	-0.1%	-1.0%	10.6%
11	1	6	Data Storage Devices	C's	0.6%	-1.5%	10.4%
12	97	55	Building Materials Wholesale	C's	1.2%	5.6%	10.2%
13	128	71	Regional - Pacific Banks	C's	-0.7%	-1.7%	9.7%
14	3	9	Water Utilities	C's	-0.6%	2.6%	9.6%
15	35	25	Department Stores	C's	-0.9%	-1.8%	9.6%
16	14	15	Security Software & Services	C's	0.9%	0.0%	8.1%
17	80	49	Small Tools & Accessories	C's	-0.1%	-1.6%	8.1%
18	7	13	Advertising Agencies	C's	-0.9%	0.6%	7.6%
19	11	15	Specialty Eateries	C's	-0.6%	-1.8%	7.6%
20	88	54	Housewares & Accessories	C's	-0.6%	-3.3%	6.8%
21	13	17	Semiconductor - Broad Line	C's	-0.8%	-3.9%	6.7%
22	6	14	Catalog & Mail Order Houses	C's	0.1%	-5.0%	6.5%
23	36	30	Auto Parts Wholesale	C's	-0.7%	-2.9%	6.5%
24	125	75	Auto Parts Stores	C's	0.6%	-1.8%	6.5%
25	62	44	Computers Wholesale	C's	0.1%	-2.0%	6.5%
26	28	27	Food Wholesale	C's	-0.2%	0.5%	6.4%
27	87	57	Information & Delivery Services	C's	-0.2%	-2.3%	6.3%
28	27	28	Healthcare Information Services	C's	-0.2%	1.3%	6.3%
29	21	25	Long Distance Carriers	C's	0.4%	-0.5%	6.2%
30	2	16	Personal Computers	C's	1.4%	-2.2%	6.1%
31	23	27	Specialized Health Services	C's	-0.8%	-0.2%	6.1%
32	111	72	Appliances	C's	-0.2%	0.1%	6.0%
34	90	62	Communication Equipment	C's	-0.1%	-2.4%	6.0%
33	50	42	Publishing - Books	C's	-1.8%	-3.0%	6.0%
35	164	100	Major Airlines	C's	0.1%	-8.6%	5.9%
36	51	44	Food - Major Diversified	C's	0.0%	-0.6%	5.8%
37	57	47	Management Services	C's	-0.1%	-0.4%	5.7%
38	74	56	Music & Video Stores	C's	0.3%	-3.9%	5.6%
39	44	42	Cleaning Products	C's	-0.7%	-0.3%	5.5%
40	73	57	Auto Dealerships	C's	0.5%	-3.3%	5.4%

     Percentage gains for the top 20 leading industries are plotted in Figure 3A.

FIGURE 3A

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 4A.

 Table 4A

Industries Advancing in Rank the Fastest

Rank [R]	Rank of Change   [C]	(R+C)/2	Industries	Companies	Last Gain	1 wk Gain	1 mo Gain
11	1	6	Data Storage Devices	C's	0.7%	-1.5%	10.4%
30	2	16	Personal Computers	C's	1.2%	-2.2%	6.1%
14	3	9	Water Utilities	C's	-0.6%	2.6%	9.6%
5	4	5	Long-Term Care Facilities	C's	-0.9%	0.0%	12.6%
72	5	39	Technical & System Software	C's	-0.6%	2.6%	2.5%
22	6	14	Catalog & Mail Order Houses	C's	-0.1%	-5.0%	6.5%
18	7	13	Advertising Agencies	C's	-1.1%	0.6%	7.6%
50	8	29	Semiconductor - Specialized	C's	2.7%	2.4%	4.4%
74	9	42	Semiconductor Equipment & Materials	C's	0.5%	-2.8%	2.3%
1	10	6	Manufactured Housing	C's	-1.3%	0.8%	22.5%
19	11	15	Specialty Eateries	C's	-0.8%	-1.8%	7.6%
113	12	63	Semiconductor- Memory Chips	C's	-0.9%	-7.2%	0.0%
21	13	17	Semiconductor - Broad Line	C's	-1.0%	-3.9%	6.7%
16	14	15	Security Software & Services	C's	0.9%	0.0%	8.1%
98	15	57	Grocery Stores	C's	-0.9%	-3.4%	0.8%
10	16	13	Networking & Communication Devices	C's	-0.3%	-1.0%	10.6%
107	17	62	Internet Information Providers	C's	-0.4%	-2.4%	0.4%
61	18	40	Entertainment - Diversified	C's	-0.5%	-0.4%	3.4%
57	20	39	Textile Industrial	C's	-0.7%	-1.5%	3.8%
51	19	35	Application Software	C's	0.0%	-2.5%	4.4%
29	21	25	Long Distance Carriers	C's	0.3%	-0.5%	6.2%
8	22	15	Electronics Stores	C's	-0.8%	-0.9%	10.9%
31	23	27	Specialized Health Services	C's	-0.8%	-0.2%	6.1%
78	24	51	Textile - Apparel Footwear & Accessories	C's	-0.6%	-2.6%	1.7%
67	25	46	Hospitals	C's	-0.4%	3.6%	3.0%
116	26	71	Semiconductor - Integrated Circuits	C's	0.7%	-1.8%	-0.5%
28	28	28	Healthcare Information Services	C's	-0.3%	1.3%	6.3%
26	27	27	Food Wholesale	C's	-0.2%	0.5%	6.4%
42	29	36	Beverages - Soft Drinks	C's	0.3%	-0.5%	5.1%
47	30	39	Recreational Goods, Other	C's	-0.4%	-4.5%	4.7%
96	31	64	Processing Systems & Products	C's	1.4%	-0.6%	0.9%
68	32	50	Business Software & Services	C's	0.0%	-1.6%	2.9%
9	34	22	Personal Products	C's	-0.9%	0.6%	10.8%
2	33	18	Surety & Title Insurance	C's	-2.2%	9.2%	16.4%
15	35	25	Department Stores	C's	-1.1%	-1.8%	9.6%
23	36	30	Auto Parts Wholesale	C's	-0.9%	-2.9%	6.5%
7	37	22	Home Improvement Stores	C's	1.5%	-3.6%	11.2%
149	38	94	Wholesale, Other	C's	1.1%	0.3%	-3.4%
53	39	46	Internet Software & Services	C's	0.5%	-2.8%	4.1%
43	40	42	Insurance Brokers	C's	1.4%	1.4%	5.0%

FIGURE 4A

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 5A.

 Table 5A

Industries Declining in Rank the Fastest

Rank [R]	Rank of Change   [C]		(R+C)/2		Industries	Companies		Last Gain	1 wk Gain	1 mo Gain
169	176	173		Industrial Equipment & Components			C's	-0.5%	-2.8%	-4.8%
131	177	154		Packaging & Containers			C's	0.0%	0.2%	-2.0%
101	178	140		Education & Training Services			C's	1.6%	-3.5%	0.7%
183	179	181		Confectioners			C's	-0.3%	-2.7%	-6.3%
188	180	184		Telecom Services - Foreign			C's	0.2%	-3.8%	-6.8%
112	181	147		Asset Management			C's	-0.1%	-2.5%	0.0%
189	182	186		Closed-End Fund - Foreign			C's	0.4%	-3.2%	-7.0%
147	183	165		Meat Products			C's	0.6%	-6.6%	-3.4%
82	184	133		Computer Based Systems			C's	-1.5%	-3.9%	1.5%
162	185	174		Waste Management			C's	0.8%	-3.3%	-4.3%
115	186	151		Research Services			C's	0.0%	-7.5%	-0.4%
180	187	184		Credit Services			C's	0.5%	-4.9%	-5.9%
140	188	164		Foreign Utilities			C's	-0.9%	-1.9%	-2.5%
135	189	162		Specialty Chemicals			C's	-0.8%	-3.6%	-2.1%
83	190	137		Regional Airlines			C's	-0.9%	-2.3%	1.5%
89	191	140		Drugs - Generic			C's	-0.8%	0.6%	1.2%
164	192	178		Rental & Leasing Services			C's	0.6%	-3.6%	-4.5%
130	193	162		REIT - Office			C's	-1.0%	-3.9%	-1.9%
210	194	202		Foreign Money Center Banks			C's	1.3%	-7.0%	-21.3%
124	195	160		Business Services			C's	0.2%	-0.9%	-1.0%
133	196	165		REIT - Diversified			C's	-0.4%	-5.3%	-2.1%
153	197	175		Savings & Loans			C's	-1.7%	-2.8%	-3.7%
127	199	163		REIT - Residential			C's	-1.1%	-4.7%	-1.4%
205	200	203		Investment Brokerage - National			C's	-0.8%	-6.3%	-13.2%
175	198	187		Gaming Activities			C's	1.0%	-8.0%	-5.5%
158	201	180		Resorts & Casinos			C's	-2.6%	-13.5%	-4.0%
157	202	180		Real Estate Development			C's	-0.4%	-5.2%	-4.0%
146	203	175		REIT - Healthcare Facilities			C's	-0.7%	-2.9%	-3.2%
159	204	182		Regional - Northeast Banks			C's	-0.5%	-4.3%	-4.2%
185	205	195		Life Insurance			C's	0.5%	-5.8%	-6.3%
136	206	171		Toys & Games			C's	-0.6%	-5.5%	-2.2%
123	207	165		Regional - Mid-Atlantic Banks			C's	-0.7%	-6.9%	-0.9%
193	208	201		Residential Construction			C's	0.6%	-5.3%	-8.1%
201	209	205		Railroads			C's