Since the stock market bottomed out in March, the Nasdaq 100 index has led the way forward, with a 55% rally, with the Dow and S&P 500 not far behind.

The nation’s refining industry is taking a nosedive today thanks to a report from Valero. The markets are reacting like all refiners are going down in flames. It is not the case by any means. Take advantage of the mistake.

Last year, oil prices went crazy. In a matter of weeks, oil shot up as high as $147 and came right back down. Today, oil is sneaking back up. The obvious temptation is to try and time it again. The smart money, however, is looking elsewhere to take advantage. We found the perfect penny play to do just that…

It looks like it will be another volatile week in the energy markets. On one side of the balance, a tremendous economic slowdown and an overabundance of oil are pushing prices down, while the other side of the balance, rather empty until now, has the threat of a major strike propping prices up.  Here’s two ways to play it.

Crude oil prices will likely remain low in the short term. Supply cuts will not keep pace with demand destruction in the near future. And that could send gas prices below $1 a gallon by Easter, says David Fessler. He gives two ways investors can turn their savings at the pump into big profits.

Gas prices have soared in the aftermath of hurricane Ike due to damage inflicted on major Gulf Coast refineries. Unleaded regular has risen 17 cents since the storm hit to reach $3.842 a gallon. Money Morning’s William Patalon III says gas shortages from a tough hurricane season are likely to affect much of the Southern US.

Valero Energy Corp. (NYSE: VLO), the largest independent refiner in the U.S. market, is a well-known and avidly traded name. Despite being a member of the super hot energy sector, Valero has seen its stock price collapse from its 52-week high of $75.75 to Friday’s close at $34.72 (a 54% decline).

Refiners Valero (VLO), Sunoco (SUN), Holly (HCO) are up on falling crude oil prices. If predictions of OPEC’s president come to pass, we could see oil back at $70 — and U.S. refiners in the green!

Gold and silver started the week by rising slowly in price from the Globex open in the Far East through the London a.m. fix.

We’re frankly sick of trying to work out who or what is responsible for high crude oil prices. Whether it’s supply-and-demand imbalance in the markets, as Dave Gonigam argues, or nasty speculators artificially inflating prices, as Andrew Gordan says, we don’t know.

What we can say is that oil is still sky high at $139 a barrel.

Shock Market Trader editor Mike Burnick says there could be a painful correction around the corner. If there is, there’s one sub-sector of the energy industry that would actually benefit big time from such an oil correction: refiners…