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Cramer: Is Wall Street playing a cruel joke on us?

Cramer breaks down today's sea-change in stocks

As exciting as it is for Jim Cramer to be in San Francisco for "Mad Money," the market didn't care one single bit. Instead some of the biggest market leaders, especially the domestic companies and the lowest of the low companies, were hit even harder on Monday.

So is the market playing a cruel joke on investors for one day, or could there be macro trends in the market that impacted stocks?

"The overriding reason why you can get a sea-change in all stocks has much less to do with earnings and much more to do with worldview," the "Mad Money" host added.

Until Monday, stocks have been impacted on an individual basis, based on earnings. If the company raised estimates, the stocks went higher. If it cut them, they went lower. Simple!

But then Cramer saw a different playing field on Monday. One where earnings no longer determined the trajectory of stocks, and instead decisions were made based on some big-picture themes that overrode everything.

So how do you spot these big-picture themes at work?

A customer uses his iPad outside an Apple store in Shanghai on June 28, 2012. 
Peter Parks | AFP | Getty Images

"Look at the best of the best among companies that reported good numbers, and the worst of the worst among companies that reported bad numbers. Then you extrapolate to make broader judgments," Cramer said.

The best of the best group was healthcare. The group has been on fire most of the year, especially UnitedHealth Group. It reported an amazing quarter and guided higher, proving it has amazing earnings power. Yet, the stock was still hammered on Monday. What the heck?

In contrast Freeport-McMoRan, the minerals and mining play on copper, gold and oil, delivered a completely disastrous quarter. It lost $2.5 billion, and it even admitted that its copper business is totally disappointing. All of this comes after last month when it had an 84 percent dividend cut. Ouch.

Yet, what has happened to Freeport since this series of disastrous events? The stock has roared higher!

Cramer can't help but wonder if all of Wall Street has gone insane.

"This frontsy-backsy action is a flashing neon sign that many investors are betting on a sea-change," he said.

It is a bet that commodity inflation will get stronger, and interest rates will go down. This was evident to Cramer, as Freeport is a total commodity play. It would only rally if investors thought inflation were coming back, which makes them want to buy gold and is why copper is rebounding. This could also be why oil has made a U-turn and is heading higher.

The one theme that threads all of these things together is a weak dollar. Commodities are priced in dollars. So, when the value of the dollar goes down, it takes more dollars to buy commodities. Thus, Cramer believes that the reaction to Freeport is simply a reaction to the possibility of a weaker dollar—not better earnings.

Likewise, UnitedHealth is the ultimate domestic stock that investors have been hiding in because you didn't have to worry about a strong dollar. However, its value rests on long-term earnings growth, but if inflation comes back, then investors won't pay as much for future earnings. That means portfolio managers will rotate out of it, just as they have been doing.

Cramer could go on about various stocks like Helmerich & Payne's sensitivity to the price of oil, or how Celgene has gotten hammered despite its amazing acquisition. Ultimately he sees the exact same themes playing out: the dollar topping, oil going higher and gold rallying.

This time is different, though.

Read more from Mad Money with Jim Cramer
Cramer Remix: Weird Apple watch moment
Cramer: A rare moment for earnings
Cramer game plan: Countdown to Apple—play it right

Even Apple reported an amazing quarter with much better iPhone sales and $5 billion in revenues. But could this breathtaking result change the tide of the stock sea?

"If you are worried about short-term movements, be aware that this vicious squall may not be finished and the damage in its wake could override terrific earnings for days and days before the tempest has passed."

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