Do you w ant to know the best way to play the potential rebound in oil that has very little downside if the current bounce from crude isn't the real deal? It sounds too good to be true. And, to be clear, there are never any guarantees in this game. After digging deep into some data and giving this a couple days' worth of thought, though, I think I see risk/reward scenario very high on reward and very low on risk. Just hear me out and decide for yourself. The Anti-Oil Trade Last year wasn't the best year in the world for solar stocks. The flagship industry ETF, the Guggenheim Solar ETF (TAN), actually lost a little ground in 2014 while the broad market gained about 12%. There's no doubt many of you already know why solar stocks struggled last year - the plunge in oil prices. Since other energy sources became uber-cheap in 2014, the need for still-relatively-expensive solar power just wasn't there. Funny thing about that commonly-held assumption though... it's not actually supported by any evidence. Now more than two quarters into rock-bottom oil prices, investors are starting to realize solar power and oil (and somewhat by extension, natural gas) prices aren't anywhere near as inversely-correlated as once presumed. And, to the extent they are connected, the recent upturn in oil prices makes now the ideal time to have this discussion. Did you know in 2014 the world installed a record-breaking amount of solar-power generating capacity? The United States alone installed 5.7 MW worth of capacity, versus 4.7 MW installed in 2013. The ramp-up across the rest of the world was comparable to the United States'. Better still, total global demand for photovoltaic cells is projected to grow 25% this year, which is - almost needless to say - about as good as it gets for any industry. The counterargument is, cheap oil is going to make solar's financial metrics just not worth it. This is where someone else's erroneous conclusions can be an opportunity for you. While oil may be super cheap forevermore, we use very little oil to generate electricity. Only about 5% of the world's oil is used to generate electricity. Natural gas is a different story - about a fourth of the United States' electricity comes from natural gas. Still, with the cost/kwh at a mere 5.6 cents for utility-scale solar [you can't get it that cheap on your at-home system] and around 6 cents for natural gas, the math now technically favors solar in some regards. The follow-up counterargument is, many of the tax incentives support solar are scheduled to go away at the end of 2016. Specifically, the 30% tax credit for a solar system is going to become only a 10% tax credit in 2017. That's not good for the industry, but truth be told, the plunge in the price of solar panels in the past few years has more than offset the impending 20% difference in the tax credit. I didn't come here to discuss the merits and drawbacks of solar though. Our only goal is to suggest solar power may be a good longer-term trade, for two specific reasons: If there is to be any impact from the 2016 end to the tax credit, that could actually accelerate installations this year and next year, making for at least two very good years for the industry. While there was never any real inverse correlation between solar demand and oil demand, most investors didn't realize it. And, those who saw it still chose not to believe it. This is changing now.... as in today, thanks to Canadian Solar (CSIQ). This proverbial "aha" moment likely means demand for solar stocks is going to rekindle soon, pressuring them higher after an unimpressive 2014. Also (though it really shouldn't matter), for those who still think oil's loss is solar's gain, then the rising price of crude at this time is apt to get investors interested in solar stocks again as well. Just for the record though, we don't think any sustained weakness in oil is going to be a liability for solar going forward. One last thing to bear in mind - though this is a longer-term theme trade we see on the horizon, it's still a trade with a limited window. Said another way, even if it's only for psychological reasons, the shrinking tax credit could really weigh in on traders' minds near the end of 2016. It's also unlikely the "aha" moment investors have when they realize oil-energy and solar energy are independent of one another is going to last forever. So which solar stocks do we like? You know, that's where we're going to punt the ball to the guys over at the Elite Opportunity service and let them chew on the idea for a while and turn it into a pick. They don't have a solar stock in the EO portfolio right now, but they've done pretty well with them in the past and I'm sure will find some compelling names in this space in the future. In fact... While I'm certainly not above borrowing one of John Monroe's bigger "themes", this trading outlook on solar wasn't one he and I discussed. I can tell you, however, this is how he often sees things and thinks, piecing together all sorts of trends as well as interpreting the sentiment (and sentiment is often the key to capitalizing on opportunities) into something specific and actionable. It's this kind of bigger-picture thinking that makes the Elite Opportunity newsletter so successful. If you'd like to hear about more big strategic themes and outlooks like the one above, the Elite Opportunity service serves them up on a pretty regular basis. It's the kind of insight you're just not going to get anywhere else. Here's how to get it all the time, or cut and paste this link: https://www.smallcapnetwork.com/pages/SCNEO/v1/ Gold Bucks the Trend We're not going to get too deep into it today, but since we told you we'd update this chart for you when it was merited, we're going to stay true to our word. It's the chart comparing yields, treasuries, the dollar, and gold. All of them made sharp reversal moves today, save one.... gold. It's the oddball. It should be rising when the dollar is losing value, but that didn't happen today. Take a look. A couple of weeks ago we mentioned most all these trends (except gold at the time, which was already in an uptrend like we said it should be) were ripe for a reversal. One day doesn't make or break a trend, but all big trends start out as small ones. Two or three more days of the same, and it's going to be tough to deny these tides have shifted direction. Whatever the case, we still like gold's upside for the foreseeable future. We suspect gold's bullish reversal near the end of last year was a prediction of sorts that the other three trends would reverse course. Well, it looks like it's happening now. It's a little ironic that gold isn't reaping the reward on a day where so many encouraging clues coming out of the woodwork. But, we still see gold setting up a base here and coming out of this lull in a bullish direction. As before, we'll give you an update on this chart when it's merited. Whatever We've already gone a little long today, so we'll be brief with our market comments. And, we'll just preface all of it by saying, as constructive as today's move was, it doesn't change the fact stocks still have a valuation problem. The resolution of Greece's woes won't improve U.S. earnings. An increase in the price of oil will really only improve the energy sector's earnings (and maybe somewhat for the materials sector). But, whatever. Nobody cared today, and I'm not going to fight the tape. Then again, I don't have to fight the tape if some major resistance is going to fight it for me. The chart of the S&P 500 below is what it is. The index blasted past the 50-day moving average line (purple), which is bullish. The problem is, we've seen it happen before to no avail. The big line in the sand is still 2064 and then the upper Bollinger band at 2071. Until those hurdles are cleared, there's no real reason to think this bullish bout will last any longer than the prior three since December have. The NASDAQ Composite's got a similar ceiling to deal with. There's a whole swath of resistance between 4760 and 4811, and until we see it toppled, we just can't afford to be presumptuously bullish. We've seen too many of these surges fizzle out before they get going. There's not a lot to say beyond that. We don't want to make something out of nothing when the market is only range-bound for the time being. That doesn't mean the situation couldn't change soon though. Stay tuned, as things have a funny way of getting real interesting, real fast, right when it doesn't seem like they will.