|
WiserTrader Industries Monthly |
|
|
__________________________________________________________________________
May 2008 Prescott, Arizona Contact Editor __________________________________________________________________________
|
|
|
Published the 3rd Tuesday of the month Subscription to Weekly Newsletter
|
Table 1A
Top-Down Portfolio Performance
|
Top-Down Trading in 2008 ($9809.07 Initial Capital) |
% Initial Capital |
|
|
Closed trades in 2008 = |
16 |
|
|
Average Trade Size = |
$1,000.00 |
|
|
Total Closed Position Share costs = |
$16,000.00 |
|
|
Gross Profit on Closed Positions = |
-$864.26 |
-8.81% |
|
Number of Open Positions = |
1 |
|
|
Cost of Open Positions = |
$1,000.00 |
|
|
Gross Profit on Open Positions in 2008 = |
$37.10 |
0.38% |
|
Total Gross Profit = |
-$827.16 |
-8.43% |
|
Broker Commission ($9.99/trade) = |
-$269.73 |
|
|
Subscription Cost to date = |
$0.00 |
|
|
Net 2008 Profit After Expenses = |
-$1,096.89 |
-11.18% |
|
Cash = |
$7,399.34 |
|
|
Current Capital = |
$8,712.18 |
5/20/08 |
|
Alerts: none
On the first of May, the dollar took a bounce and commodity related stocks began to sell off. It seemed prudent at the time to sell all currency and energy positions listed in Table 1B.
Table 1B Recently Closed Positions
The remaining stock is listed in Table 1C. Stop loss settings are explained in Section 2.
Past Additions:
iShares Lehman TIPS Bond (NYSE: TIP) is an inflation-protected US Treasury ETF.
Table 1C Top-Down Portfolio
Over recent weeks it appears that energy stocks are not pegged to the dollar as much as thought. So three energy positions are being restored to the portfolio.
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.
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%).
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
The market has changed from its sideways mode and has actually made upside progress. For the sectors charted in Figure 1A, Technology and Industrials are the monthly leaders according the Table 1D. Technology is negatively affect3ed by oil prices. Metal Fabrication is affected less so.
|
FIGURE 1A
Table 1D
Sector Rank
|
Sector * |
Last |
1 wk |
1 mo |
|
Technology |
-1.3% |
0.1% |
6.7% |
|
Industrial Goods |
-0.6% |
1.2% |
5.9% |
|
Services |
-1.0% |
-0.2% |
4.8% |
|
Transportation |
-1.6% |
-0.4% |
4.0% |
|
Consumer Cyclical |
-0.9% |
0.9% |
3.8% |
|
Energy |
0.6% |
4.9% |
3.2% |
|
Basic Materials |
-0.2% |
3.5% |
2.8% |
|
Utilities |
0.1% |
2.2% |
2.1% |
|
Financial |
-1.4% |
-1.0% |
1.2% |
|
Consumer Noncyclical |
-0.9% |
0.6% |
1.2% |
|
Healthcare |
0.2% |
0.5% |
0.8% |
|
Conglomerates |
-1.6% |
-0.5% |
-0.4% |
|
New Addition:
This month’s selection is from the metal fabrication industry which is ranked 5th in monthly performance. United States Steel Corp. (NYSE: X), a producer of steel products.
|
FIGURE 2A
|
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: Bullish The S&P 500 is currently above its SMA 30. The S&P 500 SMA 30 slope is currently positive.
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.
|
|||||||||||||||||||||||||||||||||||||||||||||
Table 3A
Leading Industries
|
Rank |
Relative To Avg |
Rank of Change |
Leading Industries |
Last |
1 wk Ago Gain |
1 mo Gain |
|
1 |
30 |
50 |
Confectioners |
-0.4% |
3.9% |
18.2% |
|
2 |
110 |
3 |
Aluminum |
-2.4% |
3.3% |
14.3% |
|
3 |
5 |
96 |
Personal Computers |
0.4% |
-1.2% |
14.2% |
|
4 |
28 |
52 |
Information Technology Services |
-0.5% |
0.7% |
13.9% |
|
5 |
15 |
79 |
Metal Fabrication |
0.4% |
2.1% |
13.8% |
|
6 |
8 |
90 |
Processing Systems & Products |
-1.5% |
-0.5% |
13.2% |
|
7 |
79 |
10 |
Office Supplies |
-1.3% |
0.5% |
13.1% |
|
8 |
61 |
19 |