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WiserTrader Industries Monthly |
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June 2008 Prescott, Arizona Contact Editor __________________________________________________________________________
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Published the 3rd Tuesday of the month Subscription to Weekly Newsletter
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Table 1A
Top-Down Portfolio Performance
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Top-Down Trading in 2008 ($9809.07 Initial Capital) |
% Initial Capital |
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Closed trades in 2008 = |
16 |
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Average Trade Size = |
$1,000.00 |
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Total Closed Position Share costs = |
$16,000.00 |
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Gross Profit on Closed Positions = |
-$864.26 |
-8.81% |
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Number of Open Positions = |
5 |
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Cost of Open Positions = |
$5,000.00 |
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Gross Profit on Open Positions in 2008 = |
-$60.99 |
-0.62% |
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Total Gross Profit = |
-$925.24 |
-9.43% |
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Broker Commission ($9.99/trade) = |
-$309.69 |
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Subscription Cost to date = |
$0.00 |
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Net 2008 Profit After Expenses = |
-$1,234.93 |
-12.59% |
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Cash = |
$3,944.81 |
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Current Capital = |
$8,574.14 |
6/17/08 |
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Closed positions for 2008 are listed in Table 1B.
Table 1B Closed Positions
Stop loss settings are explained in Section 2.
The portfolio is listed in Table 1C.
Table 1C Top-Down Portfolio
Alerts: TIP and X are rated HOLD.
Open Positions:
iShares Lehman TIPS Bond (NYSE: TIP) is an inflation-protected US Treasury ETF.
iShares Dow Jones US Energy (NYSE: IYE) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones U.S. Oil & Gas index which measures the performance of the oil and gas sector of the U.S. equity market. The top 10 holdings are: Anadarko Petroleum (2.48%), Apache Corp (3.14%), Cheveron (14.59%), Conoco Philips (4.4%), Devon Energy (3.57%), EOG Resources (2.62%), Exxon Mobil (23.09%), Occidental Petroleum (4.88%) Schlumberger (6.54%) and Transocean (2.49%).
Oil Services HOLDRs (AMEX: OIH) diversifies across 18 companies in the oil service industry. Principal holdings accounting for 80% are: Baker Hughes (7.95%), Diamond Offshore (7.47%), Halliburton (9.48%), Nabors (4.26%), National Oil Well (4.9%) Noble Corp (6.08%), Schlumberger (10.7%), Smith International ((5.67%), Transocean (18.18%) and Weatherford Intl (6.98%).
United States Oil (AMEX: USO) seeks to reflect the performance, less expenses, of the spot price of West Texas Intermediate (WTI) light, sweet crude oil. The fund will invest in futures contracts for WTI light, sweet crude oil, other types of crude oil, heating oil, gasoline, natural gas and other petroleum based-fuels that are traded on exchanges. It may also invest in other oil interests such as cash-settled options on oil futures contracts, forward contracts for oil, and OTC transactions that are based on the price of oil.
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New Positions:
The Agricultural Chemical Industry has outperformed the market recently due to planting disruptions caused by flooding in the Midwest. Optionable stocks priced over $20 are listed in Table 1D. Three stocks selected for the portfolio are:
Agrium Inc. (NYSE: AGU) produces agricultural nutrients, industrial products, and specialty products worldwide, as well as involves in the retail supply of agricultural products and services in North and South America.
Mosaic Co. (NYSE: MOS) produces crop nutrient and animal feed products worldwide.
Terra Industries Inc. (NYSE: TRA) produces nitrogen and methanol products for agricultural and industrial markets worldwide
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Table 1D
Agricultural Chemicals
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Stock |
Company
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Price |
% Change |
1 Week |
1 Month |
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AGU |
Agrium Inc. (USA) |
$110.99 |
4.9% |
20.4% |
$21.40 |
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CMP |
Compass Minerals International |
$85.40 |
1.8% |
5.6% |
$15.25 |
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DD |
E.I. du Pont de Nemours & Comp |
$47.15 |
0.0% |
3.1% |
-$2.48 |
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MON |
Monsanto Company |
$142.69 |
5.0% |
4.7% |
$17.58 |
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MOS |
Mosaic Company, The |
$161.08 |
5.0% |
11.9% |
$31.42 |
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SMG |
Scotts Miracle-Gro Company, Th |
$23.44 |
-2.0% |
-8.8% |
-$5.54 |
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SYT |
Syngenta AG (ADR) |
$65.04 |
3.1% |
5.2% |
$3.64 |
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TRA |
Terra Industries Inc. |
$55.10 |
5.9% |
21.9% |
$9.24 |
FIGURE 2A
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1. When the maximum percentage profit PMAX% is less than 65%, the initial trailing stop percentage TSPi is a fixed value that depends on market conditions. For a long position,
· Bullish, TSPi = -20%, as when the S&P 500 is above its SMA 30 · Cautious, TSPi = -15%, as when the S&P 500 is below its SMA 30 · Bearish, TSPi = -10%, as when the S&P 500 SMA 30 slope is negative
2. For a long position, when PMAX% is 65% or more greater than the buy price, · TSP 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 PMAX% = (PMAX - PBUY) / PBUY o PMAX is the maximum price reached and o PBUY is the buy price
Note: The signs for TSP and TSPi 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 PSELL is,
Current Settings: Bearish The S&P 500 is currently below its SMA 30. The S&P 500 SMA 30 slope is currently negative.
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.
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Comparative industry performance data will be provided when Yahoo manages to repair its database.
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