Oil stocks have nowhere to go but down. That was the analysis given lastweek in an article on this very blog. At this time, Chevron Corporation(NYSE:CVX) and Exxon Mobil Corporation (NYSE:XOM) were trading at theirdouble top, 52 week highs. This hypothesis was based on the currentprice of oil between $110 and $115 per barrel. The analysis clearlyshowed that higher oil would cause the markets to sell putting pressureon oil stocks, based on an economic slowdown, while lower oil wouldcause the oil stocks to sell directly, even if the markets moved higher.Essentially it was a lose, lose situation for oil stocks. In addition,stocks like Chevron and Exxon had rallied 60% higher in the last tenmonths. Since that alert, the oil stocks have stalled out and started toretreat. Chevron hit a high of $109.17 that day and is now trading backto $107.00 This should continue in the coming weeks.

Any sector related to energy seems to be on the weak side over the lastfew days. Just last week, Total SA, a European oil company, agreed tobuy up to 60% of SunPower Corporation (NASDAQ:SPWRA) for $1.38 billion.The whole solar sector opened sharply higher on this positive news.However, by the end of the day, many solar players had given up amajority of their gains. By today, the entire gains from that news andthen some have been wiped out. This is very bearish for the sector.After the close of trading, First Solar, Inc. (NASDAQ:FSLR) will reportearnings. This will shed more light on the solar industry. If oilcontinues lower, solar stocks should remain weak.

Gareth Soloway