Some may look at Tuesday's actions and think that the market is completely unreasonable—but not Jim Cramer.
"It's not that the market's stupid or unreasonable. It's just that it's prone to brain freezes and snap judgments," said the "Mad Money" host.
However, when Cramer took a look at the quick, dramatic judgments that rippled through the market Tuesday, he sees that they might not hold up in the long term.
The big mover was Apple, which dropped 1.58 percent Tuesday, even though it sold more than 60 million iPhones and has generated so much excitement around its watch. But Cramer saw a simple answer, a pattern that he has seen more than once with Apple.
The stock was up substantially ahead of earnings, which happens often. Then, when it reported a good number, someone always calls the top. And boy, there was tons of top calling on Tuesday, mostly about how people think that it can't get any better than it already is.
Short-term investors forgot about the exciting $200 billion in capital that will be returned to shareholders, or the fact that adoption in China could still be in the early stages.
In Cramer's perspective, this was business as usual. It was exactly why he warned investors not to buy the stock ahead of the quarter.
What do you do now?
Cramer advised for investors to wait a few days for Apple to settle, because there could be more analyst downgrades down the road that could hurt the stock. That is the time to pounce.
"You own Apple, don't trade it, something that the 114 million shares that changed hands told you weren't obeyed at all. That's OK. It's always that way," Cramer added.
Then there was Twitter, which Cramer thinks could have more hard times ahead. He described its earnings release as one of the most bizarre, amateurish releases he has ever seen.
Twitter was set to report after the bell on Tuesday. Somehow the information was leaked, and the market does not know how it happened. However, Cramer does know that the market hated it.
What the heck happened?
The company reported a much better than expected quarter, but then killed off all hope when it cut its forecast. This caused confusion, and sellers came out of the woodwork to get rid of the stock.
Just as with Apple, Twitter started the year much lower and has risen over time. The stock rose on investor belief that the company had finally figured out how to monetize and gain additional users.
But then, when the numbers were released, Wall Street—Cramer included—figured out that they had been too optimistic about the stock. Cramer realized that the management was not able to execute; they couldn't even release their earnings right!
Cramer attributes this to too much enthusiasm by most people. And while the stock is already down, Cramer expects that there are so many analysts out there cutting estimates that it will continue to be down for another day or two.
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"I believe that Twitter remains a gold mine, and while I thought that these folks had figured out a way to mine it I was wrong. To mine the gold, Twitter has to figure out how to make it more accessible and while it is cool, cool is not translating."
On the flipside, IBM,once a lifeless stock, showed it has life left when it bounced back on Tuesday. And while Cramer certainly does not think it is the next Salesforce.com, he does admit that it is turning itself around. Investors were thankful for the 18 percent dividend boost on Tuesday and showed their love for the stock accordingly.
At the end of the day, if you are a trader, these quick decisions made in the market will impact your wallet. But if you're an investor for the long term, like Cramer is, these judgments are likely to be reversed later on down the line.