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TheStreet Open House

Cramer's 'Mad Money' Recap: Profiting From Panic

Turning to the topic of increased competition from rail lines, Ebel said that while rail is a terrific interim solution, over the long term shipping oil and gas by pipeline is the safest and most economical way to go.

Ebel also commented on the continued delays in building the Keystone XL pipeline from Canada into the heart of the U.S. He still feels the pipeline will get built eventually, but is less optimistic. "It's not 90%-guaranteed anymore," he conceded.

Finally, when asked about natural gas liquids like propane and ethane, Ebel said those commodities will be rangebound for the next several years as new plants are built to process the increased supply. Until then, he said, more and more of those liquids will be exported.

Cramer continued his support for Spectra Energy, both the company and the MLP.

Off the Charts

In the "Off The Charts" segment, Cramer went head to head with colleague Mark Sebastian over the chart of CBOE Volatility Index (VIX), commonly known as the VIX, a measure of the volatility, or fear, in the markets at large.

According to Sebastian's research, looking at the VIX in isolation will do little for investors, but when comparing it to the performance of the S&P 500 some patterns begin to emerge that can save investors a lot of money. In particular, Sebastian noted that before the market's declines in both 2010 and 2011, the S&P and the VIX displayed identical patterns.

Sebastian said that just before the flash crash in April 2010, the S&P had begun to trade sideways, making a series of lower lows; at the same time, the VIX began to surge higher. Immediately after, the markets fell, eventually to a level where the VIX began to stabilize, which signaled the time to buy back in.

July 2011 displayed the same pattern, with sideways market action, followed by an uptick in the VIX, then a market sell off, eventually leading to the VIX stabilizing, which signaled the bottom.

Sebastian's research displayed the same pattern in today's markets since April, with the S&P hovering and the VIX beginning to uptick.

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