A lot of bad news is already priced into the oil market. Many futures participants contend that there is, approximately, a $10 per barrel premium factored into current oil prices because of hedge funds' large speculative positions. I don't doubt this.

It is hard to imagine, however, just how the price of oil and related products will be able to come down. The whole world is producing about as much oil as it can right now. This is why the alternative energy sector will continue to grow, both in terms of product development and the funds investors allocate to this industry.

In June of this year, I wrote about a small company that looked well positioned for success as part of the alternative or "new" energy investment theme. That company was Evergreen Solar Inc. (NASDAQ/ESLR) and the stock market has certainly come to realize that it has long-term staying power.

At the time, the stock was trading around $6 per share. Today, the stock is trading somewhere around $9 per share on significantly increased trading volume.

Evergreen Solar manufactures solar panels for retail and industrial markets, and the company uses its proprietary "String Ribbon" technology to help it produce solar cells at a reduced cost.

I still expect this stock to be very hot over the next 12 months, because, frankly, high energy costs are not going away.

Although I'm not an engineer myself, my best guess is that the rising flow of capital into the solar energy industry will yield some significant technological breakthroughs over the next few years. As the cost of solar energy products comes down, perhaps consumers will embrace the technology in greater numbers. I know I'd sure like to have a solar panel on my roof. In a few more years, I think it's going to be economically justified.