Oil Stocks Sell Off

Last Wednesday I pointed out the weakness in the oil stocks that I was seeing at that time. Basically what I was looking at was the fact that the S&P made a new high for the year but the oil stocks were unable to break high with the rest of the market. My interpretation of that divergence was bearish and suggested possible weakness for the oil stocks.

As you can see in the above chart, since last week the OSX (oil drillers) has been hit hard with heavy selling. The ETF for the drillers (OIH) is down again today leading the market lower. You can read my original post from last week by clicking here.