Jim Cramer can't help but relate oil to the famed childhood story of "Goldilocks and The Three Bears," with poor little Goldilocks, who likes cheaper oil, facing off with the three big, bad bears who need oil to go higher. Wait, isn't Goldilocks the hero in that story?
On Tuesday big bad papa bear mauled little Goldilocks, sending the market down once again on fears related to low energy costs, Russian economic troubles and the Federal Reserve's policy decisions.
Cramer went through the story of each bear Goldilocks must ultimately face before stocks can go higher.
The first bear is Brazil, with the gigantic national oil company Petrobras. The company is on the verge of collapse and has announced it will cut its exploration and production budget in order to save cash. Next, are the smaller oil companies in the U.S. that have a stake in places like Marcellus, Utika, Bakken, Permian, Eagle Ford, Niobrara and Mississippi shales. These companies need oil to go back up, especially if they purchased land in the past two years. Then, there is the biggest and meanest bear of them all: Russia. It's falling apart, to say the least. And to boot, its biggest asset is oil and gas.
"Oil bounced back hard today, which is fine after it's been cut in half, although it couldn't really hold its own. Still, it did bounce, and if there were no bounce it would mean that things are pretty catastrophic."
So while little Goldilocks does have her work cut out for her fighting the bears, there could be a boom on the other side of it. Low gasoline prices fueled by a strong economy could be unstoppable once they get Russia, Brazil and oil woes out of the way. Then it will be unlimited porridge for all.