WiserTrader Industries Monthly

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September 2008                          Prescott, Arizona                     Contact Editor

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Contents

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

Published the 3^rd week of the month  

Subscription to Weekly Newsletter – Still $49 Annually - Rates double in October

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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.  This month, in view the market turmoil, we are doing it by the numbers.

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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		9/16/08
Stock	Begin Date	Begin Price	Last Date	Last Price	Gross P/L (%)	Status	Sell stop	Metrics	Indicated Dividend
TIP	12/31/07	102.13	9/16/08	104.62	2.4%	Buy	97.84	Income	5.9%
JNJ	08/19/08	70.69	9/16/08	69.80	-1.3%	Buy	65.00	Income	1.8%
CASY	08/19/08	28.73	9/16/08	29.55	2.9%	Buy	27.05	Income	0.3%
Trailing Stop Settings are Bearish							Tspi (long) = -10%
Net capital for 2008 =			-20.7%				f (long) = 25%

Alerts: . . . none

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%. 

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%.

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%.

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

     Figure 1A is a view of sectors over the past month..  Sectors are ranked in Table 1D.  Transportation is flat in spite of the recent pull back in oil prices.  All other sectors declined with financials declining the least. 

FIGURE 1A

Table 1D

Sector Rank

Rank	Sector	Last	1 wk	1 mo
1	Transportation	3.3%	6.3%	0.0%
2	Financial	3.5%	-1.4%	-1.0%
3	Consumer Cyclical	0.5%	-1.4%	-3.7%
4	Services	0.6%	-1.3%	-3.8%
5	Healthcare	0.3%	-1.2%	-5.2%
6	Consumer Noncyclical	-0.5%	-2.1%	-5.2%
7	Industrial Goods	2.2%	1.5%	-5.9%
8	Utilities	0.1%	-0.3%	-6.7%
9	Energy	2.1%	0.8%	-10.3%
10	Conglomerates	1.4%	-7.0%	-11.0%
11	Technology	1.0%	-2.3%	-11.2%
12	Basic Materials	1.5%	3.0%	-13.6%
	Average	1.3%	-0.4%	-6.5%

     Financial industries are listed and ranked in Table 1E with a wide range of performance.  The best performers at this time are Regional Southeast Banks.  Among these, about half gained over the past month.  Half of those that remained traded an average of at least 200,000 shares per day.

Table 1E

Financials

Rank [R]	Rank of Change   [C]	(R+C)/2	Industries	Companies	Last Gain	1 wk Gain	1 mo Gain
2	20	11	Regional - Southeast Banks	C's	4.9%	3.3%	15.2%
4	15	10	Regional - Mid-Atlantic Banks	C's	7.1%	7.1%	12.4%
5	31	18	Regional - Midwest Banks	C's	4.9%	5.0%	11.4%
7	78	43	Regional - Pacific Banks	C's	4.8%	4.4%	10.5%
8	123	66	Surety & Title Insurance	C's	3.1%	-2.6%	9.6%
9	26	18	Regional - Southwest Banks	C's	5.3%	4.2%	8.0%
10	61	36	REIT - Hotel/Motel	C's	4.2%	-0.3%	7.2%
11	5	8	Regional - Northeast Banks	C's	4.4%	4.2%	6.6%
25	126	76	Insurance Brokers	C's	2.5%	1.7%	3.3%
26	3	15	Money Center Banks	C's	6.6%	-3.4%	3.0%
28	17	23	REIT - Diversified	C's	6.2%	1.9%	2.8%
33	37	35	Accident & Health Insurance	C's	2.3%	1.4%	2.0%
38	1	20	Foreign Money Center Banks	C's	5.8%	2.0%	1.3%
41	9	25	REIT - Industrial	C's	9.7%	1.7%	0.9%
42	40	41	REIT - Retail	C's	6.5%	-1.7%	0.6%
44	29	37	Real Estate Development	C's	2.6%	0.9%	0.2%
49	11	30	REIT - Healthcare Facilities	C's	4.6%	3.7%	-0.7%
53	19	36	Foreign Regional Banks	C's	0.2%	-0.7%	-0.9%
62	67	65	Credit Services	C's	2.4%	-3.7%	-2.0%
65	24	45	Savings & Loans	C's	3.9%	-0.3%	-2.1%
67	39	53	Life Insurance	C's	2.1%	-4.2%	-2.3%
71	32	52	Investment Brokerage - Regional	C's	5.5%	-1.4%	-2.5%
73	133	103	REIT - Office	C's	5.9%	-3.7%	-2.8%
79	27	53	REIT - Residential	C's	5.1%	-1.2%	-3.4%
103	50	77	Diversified Investments	C's	0.2%	0.0%	-5.1%
111	55	83	Property & Casualty Insurance	C's	4.2%	-4.5%	-5.5%
118	120	119	Asset Management	C's	3.8%	-2.7%	-5.9%
142	162	152	Closed-End Fund - Debt	C's	-2.4%	-7.9%	-8.3%
145	127	136	Property Management	C's	1.5%	-6.0%	-8.4%
171	158	165	Closed-End Fund - Equity	C's	-2.8%	-7.7%	-11.5%
193	131	162	Closed-End Fund - Foreign	C's	-2.1%	-7.7%	-13.8%
200	149	175	Investment Brokerage - National	C's	3.9%	-14.4%	-16.0%
109	21	65	Mortgage Investment	C's	0.1%	-12.5%	-35.7%

    The remaining ones are listed in Table 1E ranked according to monthly gains.  The three that are highlighted had positive annual earnings growth.  Of these BXS had the only positive quarterly earnings growth and becomes this month’s selection.

Table 1E

Regional - Southeast Banks

		% Chg	% Chg	Dividend	Mkt Share	1Y Sales	1Y Earnings
Symbol	Price	1 wk	1 mo	Indicated	1 Year	Growth	Growth
RF	$11.74	2.5%	40.1%	0.40%	-1.1%	42.9%	-34.4%
TRMK	$23.98	10.7%	30.2%	0.92%	0.3%	12.5%	-10.9%
FNB	$14.72	11.6%	23.3%	0.96%	1.0%	7.7%	0.9%
OZRK	$27.73	3.5%	22.9%	0.52%	0.3%	14.0%	-0.5%
WTNY	$23.72	3.2%	13.0%	1.24%	0.1%	7.3%	0.9%
HBHC	$53.39	7.6%	12.2%	0.96%	0.4%	0.5%	-26.2%
CNB	$7.30	-1.7%	10.1%	0.38%	1.1%	6.9%	-31.8%
BXS	$25.65	6.1%	8.1%	0.88%	0.3%	17.5%	7.0%
FHN	$11.55	3.5%	5.8%	0.00%	-2.4%	-1.0%	-136.3%

Addition to portfolio:

BancorpSouth, Inc. (NYSE: BXS) operates as a financial holding company for BancorpSouth Bank that provides commercial banking and financial services to individuals, and small and medium sized businesses in Mississippi, Tennessee, Alabama, Arkansas, Texas, Louisiana, Florida, and Missouri.  As of December 31, 2007, it operated approximately 295 commercial banking, insurance, mortgage, trust, and broker/dealer locations. The company was founded in 1876 and is headquartered in Tupelo, Mississippi.  The indicated dividend is 0.88%. 

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:  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	59	30	Jewelry Stores	C's	-0.2%	18.1%	21.7%
2	21	12	Regional - Southeast Banks	C's	4.9%	3.3%	15.2%
3	86	45	Sporting Goods Stores	C's	3.6%	-0.9%	13.8%
4	15	10	Regional - Mid-Atlantic Banks	C's	7.1%	7.1%	12.4%
5	31	18	Regional - Midwest Banks	C's	4.9%	5.0%	11.4%
6	43	25	Residential Construction	C's	3.1%	2.5%	11.2%
7	78	43	Regional - Pacific Banks	C's	4.8%	4.4%	10.5%
8	123	66	Surety & Title Insurance	C's	3.1%	-2.6%	9.6%
9	26	18	Regional - Southwest Banks	C's	5.3%	4.2%	8.0%
10	61	36	REIT - Hotel/Motel	C's	4.2%	-0.3%	7.2%
11	5	8	Regional - Northeast Banks	C's	4.4%	4.2%	6.6%
12	103	58	Food Wholesale	C's	0.5%	2.1%	6.6%
13	8	11	Regional Airlines	C's	3.5%	5.4%	6.5%
14	74	44	Home Furnishing Stores	C's	1.8%	0.9%	6.3%
15	57	36	Discount, Variety Stores	C's	1.2%	1.5%	6.2%
16	4	10	Major Airlines	C's	13.7%	18.6%	5.6%
17	25	21	Air Delivery & Freight Services	C's	1.6%	6.7%	5.6%
18	93	56	Apparel Stores	C's	2.1%	-1.4%	5.4%
19	64	42	Cleaning Products	C's	1.6%	2.1%	5.0%
20	71	46	Manufactured Housing	C's	10.0%	6.7%	4.5%
21	7	14	General Entertainment	C's	-1.0%	1.1%	3.9%
22	14	18	Education & Training Services	C's	1.6%	5.4%	3.9%
23	83	53	Textile - Apparel Clothing	C's	2.6%	0.7%	3.4%
24	144	84	Building Materials Wholesale	C's	2.7%	4.0%	3.3%
25	126	76	Insurance Brokers	C's	2.5%	1.7%	3.3%
26	3	15	Money Center Banks	C's	6.6%	-3.4%	3.0%
27	136	82	Long-Term Care Facilities	C's	1.8%	0.0%	2.9%
28	17	23	REIT - Diversified	C's	6.2%	1.9%	2.8%
29	106	68	Personal Products	C's	1.6%	1.6%	2.7%
30	28	29	Food - Major Diversified	C's	0.9%	1.3%	2.4%
31	44	38	Home Furnishings & Fixtures	C's	1.7%	-2.1%	2.1%
32	104	68	Toy & Hobby Stores	C's	-0.7%	-3.7%	2.1%
33	37	35	Accident & Health Insurance	C's	2.3%	1.4%	2.0%
34	139	87	Housewares & Accessories	C's	0.3%	-2.8%	2.0%
35	12	24	Air Services, Other	C's	1.6%	3.6%	2.0%
36	97	67	Auto Dealerships	C's	1.2%	-0.6%	1.9%
37	30	34	Processed & Packaged Goods	C's	0.2%	1.6%	1.8%
38	1	20	Foreign Money Center Banks	C's	5.8%	2.0%	1.3%
39	105	72	Lumber, Wood Production	C's	1.1%	-0.8%	1.2%
40	169	105	Home Improvement Stores	C's	-2.0%	-5.2%	1.0%

     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
38	1	20	Foreign Money Center Banks	C's	5.8%	2.0%	1.3%
45	2	24	Railroads	C's	0.4%	3.3%	0.1%
26	3	15	Money Center Banks	C's	6.6%	-3.4%	3.0%
16	4	10	Major Airlines	C's	13.7%	18.6%	5.6%
11	5	8	Regional - Northeast Banks	C's	4.4%	4.2%	6.6%
61	6	34	Confectioners	C's	-1.4%	-1.9%	-2.0%
22	7	15	General Entertainment	C's	-1.0%	1.1%	3.9%
13	8	11	Regional Airlines	C's	3.5%	5.4%	6.5%
41	9	25	REIT - Industrial	C's	9.7%	1.7%	0.9%
64	10	37	Tobacco Products, Other	C's	0.2%	-3.0%	-2.0%
49	11	30	REIT - Healthcare Facilities	C's	4.6%	3.7%	-0.7%
35	12	24	Air Services, Other	C's	1.6%	3.6%	2.0%
60	13	37	Diversified Computer Systems	C's	3.0%	2.2%	-1.9%
21	14	18	Education & Training Services	C's	1.6%	5.4%	3.9%
4	15	10	Regional - Mid-Atlantic Banks	C's	7.1%	7.1%	12.4%
114	16	65	Agricultural Chemicals	C's	5.4%	13.1%	-5.6%
28	17	23	REIT - Diversified	C's	6.2%	1.9%	2.8%
86	19	53	Trucking	C's	0.4%	5.7%	-3.8%
53	18	36	Foreign Regional Banks	C's	0.2%	-0.7%	-0.9%
109	21	65	Mortgage Investment	C's	0.1%	-12.5%	-35.7%
2	20	11	Regional - Southeast Banks	C's	4.9%	3.3%	15.2%
82	22	52	Research Services	C's	1.5%	-0.2%	-3.5%
101	23	62	Toys & Games	C's	0.4%	0.6%	-4.8%
65	24	45	Savings & Loans	C's	3.9%	-0.3%	-2.1%
17	25	21	Air Delivery & Freight Services	C's	1.6%	6.7%	5.6%
9	26	18	Regional - Southwest Banks	C's	5.3%	4.2%	8.0%
79	27	53	REIT - Residential	C's	5.1%	-1.2%