“Throughout these last few percentage points of gains, we haven’t had the kind of breather I like, a breather that inspires the belief that it’s all over,” he said. “Some of that is due to the miraculous run in Apple, which I believe could be overdone for the moment.
“We could use some more skeptics in Apple like the ones we got when it reported. Skeptics, short-sellers, disbelievers, bubble callers, these are the people who power a rally by building a wall of worry that needs to be climbed to go higher.” (Read More: Cramer Links Supplier to Apple’s Stock Rebound)
Cramer said the broader market — with the Dow closing down 68 points, the S&P falling 0.35 percent and the NASDAQ declining 0.29 percent — was at a critical junction. (Read More: Cramer: Don’t Let Apple’s Decline Scare You)
“When we get to levels that failed before, when we get to the ceiling, so to speak, then there are always tons of people who got in at those levels in the past and are thrilled to ring the register so they can get back to even,” he said. “There are others, who in true off-the-charts fashion, think it’s natural that we’ll fail again. That’s something we’ve seen repeatedly. Others are wary that we’re about to go into September soon, an oh-so-cruel month, and that means it’s time to trim back your holdings.”
Cramer said that the selling will be aided by underperforming funds with the usual list of reasons for a decline. Among them: “Too much complacency, stocks have had too big a move without a correction, the VIX is too low and volume has disappeared,” he said.
Added to the mix was also a rally in gold.
“To which I say, good. We need it,” Cramer said. “We need the people who trade for a living to trade out of stocks here. We need the sellers to come in and create their own negative buzz. Why on earth would we want more negativity? Simple. Because straight-up markets are dangerous markets, so we need the scalpers to come in and create the worry that’s been so sorely lacking for the next move up.”
With Apple, Cramer said smart investors need to know how to react. (Read More: Cramer: Trim Tech Stocks, Except Apple)
“You have to buy, not sell, weakness once a stock stops climbing. But once that happens and we get a reversal we must be in no hurry to buy because we have to let the freaker-outers run for the hills,” he said. “Don’t forget that Apple fell from $636 to $529 when it bottomed last time and we know from our chartists that could mean we see Apple trade down to the $560 level before we get a real bounce back up.
“Can you imagine how nuts and crazed people will be when that $66 stock goes to $56? Oops, I forgot to multiply by ten.”
Cramer said the market was taking time to digest its gains and “giving up enough to frighten the traders but not enough to shake out the investors.”
“In short, it’s doing exactly what it’s supposed to do if it is going, eventually to take out the ceiling that right now seems impossible to breach,” he said.
@MadMoneyOnCNBC on Twitter
"Mad Money" on Facebook
Call Cramer: 1-800-743-CNBC
Questions for Cramer? email@example.com
Questions, comments, suggestions for the "Mad Money" website? firstname.lastname@example.org