Oil and Gas Stocks Continue to Get Drilled

Nov 20, 2008 – Jupiter, FL – Oil and Gas stocks are continuing to lead the market lower with the worst performance as a group according to a new trading indicator, Sigma, developed by Four Sigma Trading.  Carving the deepest lows is Nabors Industries, Ltd., a land drilling contractor from Hamilton, Bermuda sporting the lowest sigma value in the stock market.  Sigma shows how normal the current stock price is by measuring the standard deviation of the recent stock price movements. 

“Sigma is an oscillator that normally falls between -2 and 2 for a typical stock with the majority of the market hovering around an expected -1 to 1 “normal” level.  When things start going too far negative or positive, we know something abnormal is happening with the stock and it’s time to take notice” said Jim Snyder of Four Sigma Trading, “Nabors is currently the stock with the lowest sigma value at -9.31.” 

In this economy and the way oil prices are headed, it’s no wonder why these stocks are going lower.  The energy industry has the lowest sigma value as a whole at -3.46. 

“If you average all of the sigmas in the market right now, you get an average of -2.70 which is incredibly low,” says Jim Snyder.  “Looking at individual industry groups, those in discount retailing and some banking sectors are beginning to recover.” 

Watching the sigma values may give good ideas for stock picks.  Stocks making high Sigmas could be takeover targets, launching new products, or gaining attention from some larger players in the market.  The highest and lowest sigmas are flagged by Four Sigma Trading for further investigation on their website at FourSigmaTrading.com.  Find out more at FourSigmaTrading.com or read the Four Sigma Trading blog at foursigma.blogspot.com.

Education Stocks Lead in Performance According to Four Sigma Trading

Jupiter, FL – A new trading indicator, Sigma, developed by Four Sigma Trading shows companies in education services were outperforming all other groups recently.  Sigma shows how normal the current stock price is by measuring the standard deviation of the recent stock price movements. The sigma indicator, developed by Jim Snyder at Four Sigma Trading shows.

“Sigma is an oscillator that normally runs between -2 and 2 for a typical stock with the majority of the market hovering around an expected -1 to 1 “normal” level.  When things start going too far negative or positive, we know something abnormal is happening with the stock and it’s time to take notice.” said Jim Snyder.

In this dark and gloomy time in the market, every industry currently has a negative sigma on average although there are still some bright spots that are worth looking into.  Education services contains companies like Capella Education Company, Apollo Group, and DeVry, Inc., which have all jumped to positive territory as of late.

Why are these stocks performing well?  It seems the education market might be counter-cyclical to unemployment rates as more adults may be enhancing their skills in a weak job market.

“If you average all of the sigmas in the market right now, you get an average of -2.55 which is incredibly low,” says Jim Snyder.  “Looking at individual industry groups, those in discount retailing and some banking sectors are beginning to recover.”

Stocks making high Sigmas could be takeover targets, launching new products, or gaining attention from some larger players in the market.  Either way, high Sigmas are flagged by Four Sigma Trading for further investigation.  Find out more at FourSigmaTrading.com or read the Four Sigma Trading blog at foursigma.blogspot.com.

Four Sigma and Three Sigma Picks NL Industries

Finally! The Three and Four Sigma Systems both picked the same stock for trading yesterday. The stock didn't rise above the close on Thursday, so it didn't actually put the stock in the portfolio. We give the stock five trading days to trade above the signal day's close to generate the trigger to buy.

Quick side note on how the system works: the trading systems "signal" a stock and then wait for a "trigger" to purchase the stock. In our case, the "trigger" happens the day after the signal day if the stock trades over the signal day's closing price. So, the signal happens the first day and then triggers a buy the next day if it goes up. The system holds the stock for 50 days and then sells it.

Either way, we were all happy to see the system finally begin to signal stocks again as the market appears to have stabilized at least for now. The sigma value of the VIX is dropping which is good news and the sigma value of the market is increasing (from a very negative value) which is good news too. Stay tuned for more signals from the system and, hopefully, triggering some buys.