Investors ran for the exits on Tuesday, sending the Dow lower by triple digits, as even the most bullish investors found little reason to buy.
Largely the sentiment on the Street turned extremely negative with pros doubting any stock could rally after DuPont reported weaker than expected results, 3M cut its full year forecast and Apple rolled over despite the debut of the long-awaited mini-iPad.
In fact, all season, corporate earnings have generated few tailwinds. A total of 145 of the S&P 500 companies have reported results so far. Sixty-three percent have missed analysts' expectations for revenue.
Technicals were also horrible. The S&P 500 closed below its 50-day moving average of about 1,434, which had been a level of support and may now act as resistance.
Warren Buffett often says be greedy when others are fearful – but every rule has an exception.
What must you know?
The headlines stock action was horrendous, but, "underneath there were signs, constructive enough signs," said Jim Cramer. They follow:
1. Google. "The stock that started this selling squall, with its hideous decline last week, actually stopped going down and then rallied nicely before surrendering to the late day swoon," Cramer said.
2. Chipotle. "The other member of the dynamic duo that crashed this bull party, spent most of the day in the green before the closing market-wide decline."
3. Coach. "How about the earnings we saw from Coach today? Remember, Coach started the huge decline in luxury good stocks when it disappointed, last quarter. Coach righted itself today delivering a solid number."
4. Whirlpool. "The stock has seemingly disappointed more times than that thing in the washing machine rotates, but on Tuesday, a standout number," said Cramer. Read More:
5. Harley-Davidson. Although the motorcycle maker reported lower quarterly earnings on Tuesday it kept its full-year forecast for shipments unchanged. Also, both sales and earnings beat expectations, as Harley made progress attracting a more diverse customer base to its iconic "hogs."
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"Honestly, ask yourself," said Cramer, "while you might not be able to hold off on getting a new dryer, or washer, you know that you can pass on getting a new Harley or an ATV or a Coach handbag. Yet, we got terrific numbers from them."
Now don't take the comments above to mean the market is near a bottom – that's now what Cramer is saying.
"As long as we have high profile gut-wrenchers like Dupont, Coach isn't going to be able to turn things around. Harley's not going to blunt 3M, and Apple's decline could overwhelm just about anything," he said.
However, despite the ugliness of the decline, Cramer thinks it's unlikely the start of something bigger. "It's a real garden variety decline, albeit one with lots of weeds and maybe even some slugs and a mole, or two."
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