Just as Apple reached its lowest point in almost seven months, the stock bounced back Tuesday. If the stock has been struggling for so long, why are the shares rallying now?
According to Cramer, it’s more than just the rumor about Apple's iPhone 5 possibly coming out in August.
“When we see stocks bounce that’s usually because the people who have been playing the trend recognize that there are some buyers at a certain level,” he said, “and then the trend followers who have been shorting… realize they have to cover.”
But just because there is a bounce today doesn’t necessarily mean the stock is heading higher long term, the “Mad Money” host cautioned.
“One of the things that we kind of forget: stocks don’t go down in a straight line,” he said. “The velocity of the Apple sell-off would take Apple to $200 in August. That’s not what happens, that’s not the way stocks trade.”
In other market news, Cramer believes that the stock gain ahead of the confidence vote in Greece happened because the euro zone finance ministers took the “chemical warfare nuclear option” off the table.
In other words, he thinks Europe didn’t want another Lehman scenario, where Greece would default and catastrophe would follow. He believes officials will do what it takes to not let Greece fail.
If the market dips tomorrow on bad news out of Greece, Cramer would buy stocks that pay dividends. (Read More: Cramer's Top Dividend Plays)
“The yields of major stocks are holding,” he said.
But he said the industrials could get hit because their gains were predicated on the idea that we’re “going to get out of the woods on Greece.”
When this story was published, Cramer's charitable trust owned Apple.
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