WiserTrader Industries Monthly

__________________________________________________________________________

November 2008                          Prescott, Arizona                     Contact Editor

__________________________________________________________________________

Contents

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

Published the 3^rd Tuesday of the month  

Subscription to Weekly Newsletter is $98 Annually

___________________________________________________________________________

Top-down stock selections are typically based on leading sectors and industries with a focus on stocks that pay dividends and show growth in market share, earnings and sales.  This month, in view of continued market volatility and the use of tight trailing stops, we continue to place emphasis on dividends.

___________________________________________________________________________

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			11/18
Stock	Begin Date	Begin Price	Last Date	Last Price	Gross P/L (%)	Status	Sell stop	Metrics	Indicated Dividend
TIP	12/31/07	101.32	11/18/08	94.64	-6.6%	Hold	86.28	Income	5.9%
UUP	10/21/08	26.04	11/18/08	26.81	3.0%	Buy	24.26	currency	0.0%
TLT	10/21/08	94.74	11/18/08	96.82	2.2%	Buy	77.90	Income	4.4%
Trailing Stop Settings are Bearish							Tspi (long) = -10%
Net capital for 2008 =			-22.3%				f (long) = 25%

Alerts: . . . TIP is a Hold.

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 current annual rate is 9.26%.  As mentioned in the weekly newsletter, the ETF gets its name from the fact that it a Lehman index.  The ETF is not managed by Lehman but by SEI Investments Distribution Co. (SEI) and Barclays Global Fund Advisors serves as an advisor.  The trailing stop for this ETF was widened to -20% to take advantage of the dividend which recently was paid at an annual  rate of 9.9%

PowerShares DB US Dollar Index Bullish (UUP) tracks the price and yield performance, before fees and expenses, of the Deutsche Bank Long US Dollar Futures index. The index is comprised solely of long futures contracts. The futures contract is designed to replicate the performance of being long the US Dollar against the Euro, Japanese Yen, British Pound, Canadian Dollar, Swedish Krona and Swiss Franc.  Use a -10% trailing stop.

iShares Lehman 20+ Year Treas Bond (TLT)  corresponds generally to the price and yield performance of the long-term sector of the United States Treasury market as defined by the Lehman Brothers 20+ Year U.S. Treasury index.  Again, the ETF is not managed by Lehman but by SEI Investments Distribution Co. (SEI) and Barclays Global Fund Advisors serves as an advisor.  The fund generally invests at least 90% of assets in the bonds of the underlying index and at least 95% of assets in U.S. government. It may also invest up to 10% of assets in U.S. government bonds not included in the underlying index. The fund also may invest up to 5% of assets in repurchase agreements collateralized by U.S. government obligations and in cash and cash equivalents.  Use a -20% trailing stop.

     Closed positions throughout this year are listed in Table 1B.

Table 1B

Closed Positions

Top - Down Portfolio Closed Positions					As of Market close on			11/18
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
BXS	9/16/08	25.65	9/29/08	26.15	1.9%	closed	26.96	Income
JNJ	8/19/08	70.69	10/6/08	64.50	-8.8%	closed	65.00	Income
CASY	8/19/08	28.73	10/7/08	27.01	-6.0%	closed	27.25	Income
SJL	10/21/08	143.67	10/28/08	159.00	10.7%	closed	175.50	Income
FXY	10/21/08	99.65	10/28/08	101.96	2.3%	closed	95.94	currency

     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 =	29
Average Trade Size =	$1,000.00
Total Closed Position Share costs =	$29,000.00
Gross Profit on Closed Positions =	-$1,623.27	-16.55%
Number of Open Positions =	3
Cost of Open Positions =	$3,000.00
Gross Profit on Open Positions in 2008 =	-$14.41	-0.15%
Total Gross Profit =	-$1,637.68	-16.70%
Broker Commission ($9.99/trade) =	-$549.45
Subscription Cost to date =	$0.00
Net 2008 Profit After Expenses =	-$2,187.13	-22.30%
Cash =	$4,636.35
Current Capital =	$7,621.94	11/18/08

     Figure 1A is a view of sectors over the past month..  Sectors are ranked in Table 1D.  The major indices are down an average of 32% for the year.  The market continues to move sideways.

FIGURE 1A

Table 1D

Sector Rank

Rank	Sector	Last	1 wk	1 mo
1	Utilities	0.4%	1.4%	4.8%
2	Energy	0.1%	-2.7%	-6.0%
3	Healthcare	-0.6%	-3.5%	-8.0%
4	Consumer Noncyclical	0.5%	-3.6%	-8.7%
5	Transportation	-0.3%	-7.8%	-14.2%
6	Technology	-0.2%	-5.9%	-15.9%
7	Services	-0.6%	-6.6%	-19.7%
8	Conglomerates	0.7%	-7.2%	-20.3%
9	Financial	-0.5%	-8.4%	-22.0%
10	Consumer Cyclical	-0.6%	-6.3%	-22.2%
11	Industrial Goods	-0.2%	-6.6%	-24.4%
12	Basic Materials	-1.4%	-10.1%	-28.5%
	Average	-0.2%	-5.6%	-15.4%

Additions to portfolio:

     The utility sector is the only one that gained over the past month.  Within this sector are five utility industries: diversified (+9.3%), electric (+7.5%), foreign (-7.0%), gas (+6.5%) and water (+8.0%.

CH Energy Group, Inc., (NYSE: CHG) is a diversified utility company.  Through its subsidiaries, Central Hudson Gas & Electric Corporation (Central Hudson) and Central Hudson Enterprises Corporation (CHEC), it engages in the electric utility, natural gas utility, and fuel distribution business.  Central Hudson purchases, sells at wholesale, and distributes electricity and natural gas at retail in portions of New York State.  The stock price has been net flat, yet quite volatile, over the past month.  The stock has gained 30% since its October low as a result of disappointing earnings.  CH Energy Group was founded in 1926 and is headquartered in Poughkeepsie, New York.  The company expects to pay a 5.1% dividend. 

2.0 Portfolio Trailing Stop Settings

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:  Bearish

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

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

	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	46	24	Farm Products	C's	1.0%	3.4%	25.2%
2	34	18	Foreign Regional Banks	C's	-0.6%	-1.5%	21.1%
3	13	8	Medical Practitioners	C's	2.0%	3.3%	19.3%
4	102	53	Tobacco Products, Other	C's	0.2%	0.5%	12.6%
5	52	29	Major Integrated Oil & Gas	C's	3.8%	2.2%	10.1%
6	93	50	Education & Training Services	C's	-0.1%	-1.5%	10.1%
7	95	51	Telecom Services - Domestic	C's	-1.0%	-2.5%	10.0%
8	79	44	Diversified Utilities	C's	0.5%	1.4%	9.3%
9	94	52	Drug Manufacturers - Major	C's	2.9%	0.6%	8.9%
10	54	32	Waste Management	C's	2.8%	1.4%	8.5%
11	58	35	Water Utilities	C's	1.5%	2.5%	8.0%
12	126	69	Home Health Care	C's	-0.2%	-0.6%	7.8%
13	87	50	Electric Utilities	C's	0.1%	1.4%	7.5%
14	103	59	Closed-End Fund - Debt	C's	-1.9%	-8.9%	6.9%
15	110	63	Gas Utilities	C's	-0.6%	-0.8%	6.5%
16	66	41	Drugs - Generic	C's	0.4%	-2.5%	6.2%
17	16	17	Beverages - Brewers	C's	1.3%	2.2%	3.4%
18	163	91	Oil & Gas Pipelines	C's	-1.5%	-8.2%	3.2%
19	131	75	Aerospace/Defense - Major Diversified	C's	-2.1%	-7.3%	1.1%
20	29	25	Grocery Stores	C's	-0.2%	-1.0%	1.1%
21	128	75	Biotechnology	C's	-0.3%	-1.3%	1.1%
22	49	36	Medical Laboratories & Research	C's	0.6%	0.0%	0.8%
23	90	57	Auto Parts Stores	C's	2.2%	-2.9%	0.2%
24	41	33	Personal Products	C's	2.5%	0.9%	0.0%
25	91	58	Cigarettes	C's	1.9%	-2.3%	-0.1%
26	81	54	Drug Manufacturers - Other	C's	-0.5%	-3.0%	-0.3%
27	40	34	Home Improvement Stores	C's	2.2%	1.4%	-0.9%
28	55	42	Restaurants	C's	0.9%	-0.9%	-1.2%
29	105	67	Auto Parts Wholesale	C's	2.0%	1.8%	-1.3%
30	97	64	Security Software & Services	C's	-0.5%	-1.6%	-1.3%
31	5	18	Air Delivery & Freight Services	C's	1.7%	-1.1%	-2.3%
32	118	75	Discount, Variety Stores	C's	0.8%	-5.3%	-2.6%
33	23	28	Healthcare Information Services	C's	0.0%	-5.7%	-3.1%
34	45	40	Processed & Packaged Goods	C's	1.6%	-1.0%	-3.7%
35	14	25	Oil & Gas Refining & Marketing	C's	0.9%	-4.1%	-3.8%
36	69	53	Savings & Loans	C's	-0.2%	-1.3%	-4.0%
37	51	44	Cleaning Products	C's	2.1%	5.9%	-5.0%
38	101	70	Publishing - Books	C's	-0.6%	-3.3%	-5.0%
39	1	20	Music & Video Stores	C's	2.4%	-3.0%	-5.2%
40	135	88	Regional - Southwest Banks	C's	0.3%	-5.2%	-5.5%

     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
39	1	20	Music & Video Stores	C's	2.4%	-3.0%	-5.2%
49	2	26	Foreign Utilities	C's	0.6%	2.2%	-7.0%
45	3	24	Internet Service Providers	C's	2.9%	0.0%	-6.6%
68	4	36	Independent Oil & Gas	C's	-2.7%	-2.5%	-10.8%
31	5	18	Air Delivery & Freight Services	C's	1.7%	-1.1%	-2.3%
135	6	71	Marketing Services	C's	3.5%	3.6%	-22.3%
73	7	40	Trucks & Other Vehicles	C's	-4.7%	-1.0%	-11.7%
80	8	44	Staffing & Outsourcing Services	C's	0.5%	-1.8%	-12.3%
133	9	71	Wholesale, Other	C's	-1.9%	-2.5%	-21.7%
97	10	54	Oil & Gas Drilling & Exploration	C's	-3.4%	-2.3%	-15.1%
119	11	65	Oil & Gas Equipment & Services	C's	3.2%	-1.1%	-19.3%
58	12	35	Telecom Services - Foreign	C's	0.3%	0.7%	-8.8%
3	13	8	Medical Practitioners	C's	2.0%	3.3%	19.3%
35	14	25	Oil & Gas Refining & Marketing	C's	0.9%	-4.1%	-3.8%
71	15	43	Business Services	C's	1.4%	-0.9%	-11.2%
17	16	17	Beverages - Brewers	C's	1.3%	2.2%	3.4%
102	17	60	Information & Delivery Services	C's	-2.0%	-3.0%	-16.5%
53	18	36	Wireless Communications	C's	0.6%	0.7%	-7.9%
148	19	84	Home Furnishings & Fixtures	C's	2.1%	-3.1%	-24.1%
63	20	42	Data Storage Devices	C's	1.4%	-2.8%	-9.7%
107	21	64	Sporting Goods	C's	0.2%	-5.2%	-17.2%
47	22	35	Diagnostic Substances	C's	-0.9%	-1.5%	-6.7%
33	23	28	Healthcare Information Services	C's	0.0%	-5.7%	-3.1%
74	24	49	Industrial Equipment & Components	C's	2.4%	0.8%	-11.9%
104	25	65	Diversified Computer Systems	C's	7.6%	-1.1%	-17.0%
157	26	92	Farm & Construction Machinery	C's	0.3%	-4.4%	-25.8%
51	27	39	Drug Related Products	C's	1.2%	-2.5%	-7.0%
20	28	24	Grocery Stores	C's	-0.2%	-1.0%	1.1%
92	29	61	Cement	C's	-4.6%	-9.1%	-14.6%
124	30	77	Diversified Machinery	C's	-0.1%	-3.1%	-20.0%
171	31	101	Publishing - Newspapers	C's	1.9%	-7.6%	-30.9%
103	32	68	Broadcasting - TV	C's	1.6%	-6.7%	-16.7%
173	33	103	Long Distance Carriers	C's	-0.8%	2.3%	-31.1%
2	34	18	Foreign Regional Banks	C's	-0.6%	-1.5%	21.1%
42	35	39	Drug Stores	C's	2.5%	0.3%	-5.7%
112	36	74	Resorts & Casinos	C's	-1.8%	-11.4%	-44.3%
44	37	41	Basic Materials Wholesale	C's	-2.1%	-1.9%	-6.3%
56	38	47	Food Wholesale	C's	1.5%	-3.4%	-8.4%
54	40	47	Management Services	C's	1.2%	-3.5%	-8.3%
27	39	33	Home Improvement Stores	C's	2.2%	1.4%	-0.9%

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
211	176	194	Sporting Goods Stores	C's	-7.2%	-12.0%	-45.3%
198	177	188	General Contractors	C's	0.8%	-4.4%	-39.0%
50	178	114	Confectioners	C's	1.9%	-8.0%	-7.0%
117	179	148	Communication Equipment	C's	1.0%	-7.1%	-19.1%
167	180	174	Home Furnishing Stores	C's	-3.0%	-7.7%	-29.0%
154	181	168	Gaming Activities	C's	-1.0%	-9.8%	-25.5%
85	182	134	Photographic Equipment & Supplies	C's	-1.3%	-5.4%	-13.8%
129	183	156	Housewares & Accessories	C's	-2.2%	-11.1%	-20.9%
159	184	172	Meat Products	C's	0.4%	-3.1%	-26.5%
183	185	184	Department Stores	C's	-3.5%	-19.7%	-33.5%
204	186	195	Security & Protection Services	C's	-0.7%	-9.3%	-40.2%
143	188	166	Shipping	C's	-2.0%	-9.8%	-23.3%
130	187	159	Semiconductor Equipment & Materials	C's	-2.9%	-9.7%	-21.0%
207	189	198	Dairy Products	C's	-1.9%	-19.9%	-40.7%
144	190	167	Semiconductor - Specialized	C's	-3.0%	-9.9%	-23.5%
89	191	140	Consumer Services	C's	-6.1%	-9.2%	-14.2%
186	192	189	Heavy Construction	C's	-2.6%	-11.2%	-34.6%
126	193	160	Conglomerates	C's	0.7%	-7.2%	-20.3%
101	194	148	Regional - Midwest Banks	C's	0.1%	-4.5%	-16.5%
59	195	127	Regional Airlines	C's	0.1%	-5.1%	-9.0%
202	196	199	Textile Industrial	C's	-1.0%	-15.0%	-39.5%
155	197	176	Textile - Apparel Footwear & Accessories	C's	-0.5%	-1.6%	-25.6%
180	199	190	REIT - Healthcare Facilities	C's	-1.6%	-3.8%	-32.9%
128	198	163	Medical Appliances & Equipment	C's	-5.8%	-12.4%	-20.7%
77	200	139	Regional - Pacific Banks	C's	-1.2%	-8.2%	-12.1%
121	201	161	Internet Information Providers	C's	-0.1%	-5.5%	-19.6%