January 2009 Industry Rankings

WiserTrader Industries Monthly

__________________________________________________________________________

January 2009 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

___________________________________________________________________________

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.

Table 1A

Top-Down Portfolio

Top - Down Portfolio Open Positions						As of Market close on			1/20/09
Stock	Begin Date	Begin Price	Last Date	Last Price	Gross P/L (%) *	Status	Sell stop	Metrics	Indicated Dividend
TIP	12/31/07	101.32	1/20/09	99.64	5.0%	Buy	86.28	Income	5.9%
TLT	10/21/08	94.11	1/20/09	114.28	22.9%	Buy	97.52	Income	5.2%
CHG	11/18/08	41.93	1/20/09	46.89	11.8%	Hold	45.74	Income	5.2%
IEF	12/23/08	98.84	1/20/09	97.71	-0.8%	Buy	89.67	Income	4.5%
*Trailing Stop Settings are Bearish*							*Tspi (long) = -10%*
*Net capital for 2008 =*			*-0.7%*				*f (long) = 25%*

* Gross P/L includes dividends, except for CHG.

Alerts: . . . CHG 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%

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.

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.

ISHARES BARCLAYS 7-1(NYSEArca: IEF) seeks results that correspond generally to the price and yield performance of the intermediate-term sector of the United States Treasury market as defined by the Lehman Brothers 7-10 Year U.S. Treasury index. 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. This ETF is currently trading at its net asset value with a current distribution rate of 3.8%.

The overall performance is shown in Table 1B.

Table 1B

Top-Down Portfolio Performance

Top-Down Trading in 2009 ($10000 Initial Capital)		% Initial Capital
Closed trades =	0
Average Trade Size =	$1,000.00
Total Closed Position Share costs =	$0.00
Gross Profit on Closed Positions =	$0.00	0.00%
Number of Open Positions =	4
Cost of Open Positions =	$4,000.00
Gross Profit on Open Positions =	-$66.16	-0.66%
Total Gross Profit =	-$66.16	-0.66%
Broker Commission ($9.99/trade) =	$0.00
Subscription Cost to date =	$0.00
Net Profit After Expenses =	-$66.16	-0.66%
Cash =	$6,000.00
Current Capital =	$9,933.84	1/20/09

Figure 1A is a view of sectors over the past month.. Sectors are ranked in Table 1C. The major indices are down an average of 40.1% for the year. The market continues to move sideways.

FIGURE 1A

Table 1C

Sector Rank

Rank	Sector	Last	1 wk	1 mo
1	Healthcare	-4.6%	-4.7%	-2.5%
2	Consumer Noncyclical	-3.3%	-4.4%	-4.1%
3	Energy	-6.7%	-6.9%	-4.3%
4	Basic Materials	-6.1%	-5.6%	-4.4%
5	Utilities	-3.8%	-4.1%	-4.5%
6	Services	-5.4%	-6.2%	-6.4%
7	Technology	-5.5%	-7.0%	-7.1%
8	Transportation	-6.0%	-9.2%	-7.6%
9	Consumer Cyclical	-6.0%	-8.5%	-8.1%
10	Industrial Goods	-6.1%	-7.8%	-10.5%
11	Conglomerates	-5.9%	-12.9%	-12.8%
12	Financial	-10.1%	-12.2%	-14.4%
	Average	-5.8%	-7.5%	-7.2%

Addition to portfolio:

iShares Barclays 10-20 Year Treasury Bnd (NYSE: TLH) trackS the price and yield performance, before fees and expenses, of the Barclays Capital 10-20 Year U.S. Treasury index. 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. The ETF, price right at its net asset value, was chosen as an income position. The current distribution rate is 4.25%. A 20% trailing stop will be used.

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
T_SPi	-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	100	51	Closed-End Fund - Foreign	C's	-1.2%	-1.6%	19.0%
2	34	18	Closed-End Fund - Debt	C's	-1.1%	-2.7%	14.4%
3	5	4	Education & Training Services	C's	-2.7%	3.1%	10.2%
4	51	28	Drugs Wholesale	C's	-2.7%	0.3%	8.2%
5	108	57	Silver	C's	-3.8%	1.7%	7.3%
6	48	27	Medical Practitioners	C's	-6.3%	-11.3%	7.2%
7	53	30	Closed-End Fund - Equity	C's	-2.3%	-3.8%	7.1%
8	49	29	Nonmetallic Mineral Mining	C's	-2.6%	0.9%	5.1%
9	90	50	Music & Video Stores	C's	-5.0%	-5.4%	4.9%
10	54	32	Gold	C's	0.6%	7.6%	3.0%
11	1	6	Publishing - Newspapers	C's	-1.5%	-4.6%	2.9%
12	3	8	Food - Major Diversified	C's	-1.5%	-1.2%	2.5%
13	4	9	Cigarettes	C's	-1.0%	-0.5%	2.1%
14	9	12	Scientific & Technical Instruments	C's	-4.8%	-0.9%	1.6%
15	10	13	Publishing - Periodicals	C's	-4.6%	-2.1%	1.4%
16	24	20	Drugs - Generic	C's	-4.5%	-4.7%	1.3%
17	7	12	Auto Manufacturers - Major	C's	-1.2%	-2.6%	1.0%
18	17	18	Oil & Gas Pipelines	C's	-4.0%	-4.9%	0.9%
19	75	47	Meat Products	C's	-5.0%	-2.9%	0.8%
20	2	11	Diversified Utilities	C's	-2.6%	-2.7%	0.7%
21	115	68	Wholesale, Other	C's	-5.0%	-7.3%	0.6%
22	23	23	Waste Management	C's	-3.6%	-2.6%	0.3%
23	32	28	Electronic Equipment	C's	-5.4%	-8.7%	0.3%
24	120	72	Major Airlines	C's	-6.8%	-4.8%	0.1%
25	14	20	Aerospace/Defense - Major Diversified	C's	-3.9%	-4.0%	0.0%
26	99	63	Computers Wholesale	C's	-6.1%	-3.4%	-0.2%
27	31	29	Photographic Equipment & Supplies	C's	-4.8%	-11.7%	-0.2%
28	78	53	Aerospace/Defense Products & Services	C's	-4.2%	-4.9%	-0.4%
29	62	46	Trucks & Other Vehicles	C's	-6.9%	-10.4%	-0.5%
30	64	47	Sporting Activities	C's	-5.7%	-5.5%	-0.8%
31	71	51	Regional Airlines	C's	-4.7%	-5.0%	-0.8%
32	83	58	Foreign Regional Banks	C's	-8.9%	-10.1%	-0.8%
33	52	43	Oil & Gas Refining & Marketing	C's	-6.1%	-5.4%	-0.8%
34	74	54	Hospitals	C's	-6.5%	-6.0%	-0.9%
35	6	21	Electric Utilities	C's	-2.2%	-2.6%	-1.1%
36	143	90	Semiconductor- Memory Chips	C's	-10.3%	-9.9%	-1.1%
37	84	61	Rental & Leasing Services	C's	-6.7%	-7.4%	-1.2%
38	19	29	Medical Equipment Wholesale	C's	-4.1%	-2.3%	-1.3%
39	8	24	Auto Parts Wholesale	C's	-3.9%	-1.8%	-1.5%
40	56	48	Biotechnology	C's	-3.7%	-2.5%	-1.5%

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
11	1	6	Publishing - Newspapers	C's	-1.5%	-4.6%	2.9%
20	2	11	Diversified Utilities	C's	-2.6%	-2.7%	0.7%
12	3	8	Food - Major Diversified	C's	-1.5%	-1.2%	2.5%
13	4	9	Cigarettes	C's	-1.0%	-0.5%	2.1%
3	5	4	Education & Training Services	C's	-2.7%	3.1%	10.2%
35	6	21	Electric Utilities	C's	-2.2%	-2.6%	-1.1%
17	7	12	Auto Manufacturers - Major	C's	-1.2%	-2.6%	1.0%
39	8	24	Auto Parts Wholesale	C's	-3.9%	-1.8%	-1.5%
14	9	12	Scientific & Technical Instruments	C's	-4.8%	-0.9%	1.6%
15	10	13	Publishing - Periodicals	C's	-4.6%	-2.1%	1.4%
44	11	28	Drug Stores	C's	-3.4%	2.2%	-1.9%
54	12	33	Tobacco Products, Other	C's	-3.4%	-1.3%	-2.6%
46	13	30	Drug Delivery	C's	-6.5%	-8.6%	-2.0%
25	14	20	Aerospace/Defense - Major Diversified	C's	-3.9%	-4.0%	0.0%
55	15	35	Water Utilities	C's	-2.4%	0.6%	-2.6%
87	16	52	Cleaning Products	C's	-3.4%	-0.7%	-5.0%
18	17	18	Oil & Gas Pipelines	C's	-4.0%	-4.9%	0.9%
89	18	54	Multimedia & Graphics Software	C's	-5.4%	-3.2%	-5.1%
38	19	29	Medical Equipment Wholesale	C's	-4.1%	-2.3%	-1.3%
64	20	42	Broadcasting - Radio	C's	-3.1%	-7.8%	-3.3%
102	21	62	Processing Systems & Products	C's	-4.7%	-9.5%	-6.4%
82	22	52	Personal Products	C's	-0.9%	-4.1%	-4.7%
22	23	23	Waste Management	C's	-3.6%	-2.6%	0.3%
16	24	20	Drugs - Generic	C's	-4.5%	-4.7%	1.3%
121	25	73	Grocery Stores	C's	-0.8%	-0.5%	-8.3%
81	26	54	Sporting Goods	C's	-3.9%	-5.5%	-4.7%
66	27	47	Insurance Brokers	C's	-2.5%	-4.9%	-3.4%
71	28	50	Processed & Packaged Goods	C's	-2.2%	-0.8%	-3.9%
68	29	49	Application Software	C's	-5.9%	-5.9%	-3.6%
43	30	37	Medical Instruments & Supplies	C's	-3.2%	-2.1%	-1.7%
27	31	29	Photographic Equipment & Supplies	C's	-4.8%	-11.7%	-0.2%
23	32	28	Electronic Equipment	C's	-5.4%	-8.7%	0.3%
80	35	58	Gas Utilities	C's	-4.1%	-5.7%	-4.5%
2	33	18	Closed-End Fund - Debt	C's	-1.1%	-2.7%	14.4%
96	34	65	Specialty Chemicals	C's	-6.0%	-6.0%	-5.6%
84	36	60	Medical Appliances & Equipment	C's	-3.7%	-2.9%	-4.7%
61	37	49	Oil & Gas Equipment & Services	C's	-8.0%	-10.7%	-3.0%
72	38	55	Consumer Services	C's	-4.6%	1.1%	-3.9%
152	39	96	Housewares & Accessories	C's	-5.2%	-12.1%	-10.7%
47	40	44	Synthetics	C's	-5.7%	-4.7%	-2.0%

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
197		176	187	Sporting Goods Stores	C's	-7.0%		-11.9%	-18.1%
142		178	160	Computer Peripherals	C's	-8.2%		-8.8%	-9.9%
98		177	138	Air Services, Other	C's	-3.8%		-11.7%	-6.0%
134		179	157	REIT - Healthcare Facilities	C's	-10.4%		-2.3%	-9.2%
173		180	177	Small Tools & Accessories	C's	-6.0%		-9.6%	-13.0%
138		181	160	Catalog & Mail Order Houses	C's	-5.6%		-8.1%	-9.6%
107		182	145	Computer Based Systems	C's	-5.6%		-1.2%	-7.1%
147		183	165	Semiconductor - Integrated Circuits	C's	-7.1%		-7.3%	-10.2%
149		184	167	Steel & Iron	C's	-8.5%		-11.2%	-10.5%
127		185	156	Basic Materials Wholesale	C's	-7.3%		-7.3%	-8.8%
200		186	193	REIT - Hotel/Motel	C's	-16.3%		-15.2%	-19.8%
88		187	138	Health Care Plans	C's	-5.2%		-8.1%	-5.1%
183		188	186	Toy & Hobby Stores	C's	-1.7%		-20.4%	-15.0%
186		189	188	Business Services	C's	-6.7%		-12.1%	-15.6%
124		190	157	Appliances	C's	-7.5%		-10.3%	-8.5%
193		191	192	Residential Construction	C's	-9.0%		-10.3%	-17.0%
99		192	146	Gaming Activities	C's	-7.5%		-10.8%	-6.1%
165		193	179	Independent Oil & Gas	C's	-7.6%		-9.2%	-11.9%
160		194	177	Industrial Metals & Minerals	C's	-10.3%		-11.8%	-11.3%
123		196	160	Lodging	C's	-8.2%		-13.2%	-8.4%
117		195	156	Surety & Title Insurance	C's	-9.3%		-10.0%	-7.9%
190		198	194	Accident & Health Insurance	C's	-11.0%		-13.5%	-16.5%
137		197	167	Diversified Communication Services	C's	-5.5%		-9.8%	-9.6%
187		199	193	Aluminum	C's	-10.6%		-15.4%	-15.7%
207		200	204	Foreign Money Center Banks	C's	-13.4%		-22.8%	-23.0%
182		201	192	Foreign Utilities	C's	-7.9%		-9.9%	-14.7%
176		202	189	Asset Management	C's	-9.6%		-15.2%	-13.7%
196		203	200	REIT - Retail	C's	-11.3%		-8.4%	-18.0%
194		204	199	Diversified Investments	C's	-11.4%		-16.8%	-17.5%
111		205	158	Office Supplies	C's	-5.8%		-7.6%	-7.5%
191		206	199	Investment Brokerage - Regional	C's	-11.6%		-15.0%	-16.6%
167		207	187	Internet Service Providers	C's	-6.7%		-16.8%	-12.2%
204		208	206	Long Distance Carriers	C's	-6.1%		-7.2%	-22.1%
162		209	186	Machine Tools & Accessories	C's	-6.1%		-10.5%	-11.4%
151		210	181	REIT - Industrial	C's	-13.1%		-9.2%	-10.6%
188		211	200	Cement	C's	-10.7%		-10.6%	-15.7%
203		212	208	Textile Industrial	C's	-7.5%		-12.8%	-21.3%
199		213	206	General Entertainment	C's	-9.3%		-15.8%	-19.7%
208		214	211	Life Insurance	C's	-14.7%		-19.6%	-23.1%
206		215	211	Resorts & Casinos	C's	-11.5%		-17.5%	-23.0%