Preheat oven to 350 degrees F. Line a baking sheet with parchment paper; set aside.
In a medium sized bowl combine the nuts, cinnamon, powdered sugar, salt, and cayenne pepper. Stir in the water. Stir well to coat the nuts and spread on the baking sheet. Bake for 10-12 minutes or until the nuts start to become a little darker in color and start to smell nutty. Remove from oven and stir well. Let cool completely before storing.