Terrifying Tuesday

8 am (Hawaii) Isn't it odd that the root of terror is also the root for terrific? Terra, terra, terra. Tora, tora, tora. I woke up a half-hour ago and enjoyed a local morning chit-chat show. I admired the flow of news, stuff about traffic (slow as molasses) and enjoyed the fact that I am not sitting in it.

Switching over to CNBC and seeing the Dow down more than 100 points also made me grateful to be out of this bitchy market. I can watch the flow of traffic and stay far away, getting my beauty sleep. While geniuses like Le Fly continue to pound the table for oil refiners (crack spread is now over $26), it is always intriguing to see lifers like Cramer acknowledge (early in the week) that though there are numbers on the bullish side, he was staying clear out of this market. Hate Cramer all you like, but when he gets word from the Street that shit is about to hit the fan, he usually shares the information.

As always, the dude who bought truckloads of AAPL at 12 is relaxed and sleeping until noon, for he has not a worry in the world. The rest of us need to be nimble and astute.

Update 8:18 am (Hawaii) My watch list is 31% green, 69% red. Not as extreme as yesterday (20% red). AAPL has stabilized at 330 and stands at 332.46 (+0.5%). This is clearly not showing signs of an all-out collapse. The machines are still buying MWW (+3.6%), CMG (+2.9%), HGSI (+2.8%), NFLX (+2.1%), GMCR (+1.8%).

Crude oil continues its pullback. UCO is down 5.6% to 56.41. EXK is down 4% (10.94) after lifting above 12 recently. WNR, the oil refiner I Should Have Entered, is up nearly 1% (17.30) thanks to those increasing (aforementioned) crack spreads. Sure, the few stocks that are up could join the selloff before the close in 100 minutes.

QID, TZA, the usual bear plays in skittish markets are doing okay. But they often break down when a catalyst arrives. Earnings season is here. The bear play could turn into a bear trap.

I'll stay away from the forest and leave the trapping to professionals. Still 100% cash.

Update 8:36 am (Hawaii) Taking a closer look at WNR. If crude continues to fall but crack spreads stay up (or get higher, as is the case in recent weeks), somebody's going to eventually make money when the selloff is over. If not for today's pullback, WNR would not be up just 1%. It would be 3-4%, my guess. 

WNR doubled from below 9 to 18 between mid-December and mid-February. That's why this pullback to 17ish is not a big deal long term. Demand for energy will grow as summer nears. Japan needs to import more than ever. America is willing to pay $4/gallon, it appears, but chaos will ensue if it gets near $5 for any duration. As long as business owners are willing to figure $4 gas into the equation, it is possible the economy can continue to recover. Therein lies the rub. Most CEOs and mom-and-pop operators will look to slash costs. The current climate is exactly why they refrained from hiring en masse in the past year. 

But all in all, WNR is very appealing here. I refuse to play the crack spread. Human psychology matters more, and so far, the populace is content to let crack spreads spiral into deep space without a current correlation to refiner stock prices. For now.