It turns out that there was a giant shortfall underneath the struggling company. Some $240 million in revenues were lost, resulting in a 5-cent earnings miss because the company has too much oil and gas exposure. Cramer was shocked. He knew it was on a downward spiral, but he didn't think things were that bad.
Based on these negative qualities, one would expect the stock to get pummeled. Instead, it managed to jump 2 percent on Tuesday!
What the heck happened? Eaton's hefty yield is what happened, and with such a juicy yield the stock became attractive once again. Especially given that company possesses such a large cash flow, there were no concerns about safety.
"That's the fuel behind this bounce, a stock with an accidentally high dividend yield, something that caused many industrials to stop going down during the great recession," Cramer said. (Tweet this)
Cramer saw the same thing occur with Dover, PPG and United Technologies. United makes elevators, a business that has been subjected to the pain of China's slowing economy. It also makes engines, so it didn't help that Delta Airlines mentioned a wide-body aircraft glut. United reported an $800 million revenue shortfall on Tuesday morning.
Sure enough, United Technologies managed to soar almost 4 percent by Tuesday's close. The stock had already traded down to $85 three weeks ago from $124 in February and closed at $95 Tuesday.
Read more from Mad Money with Jim Cramer
Cramer Remix: What to buy from Wal-Mart's fallout
Cramer: Don't gamble on this investment strategy
Cramer: Cashing in on Peltz's power in Mondelez
"What do these companies have in common? How about a belief that China can't get much worse and that Europe is getting much better? That the Fed is on hold? Whatever, it is working, and these gift horses are not getting a mouth examination," Cramer said.
And if industrials are going to rally that means the money had to come from somewhere. Cramer saw it rotating out of biotechs, Tesla, Amazon and Google.
So, at the end of the day, it was clear to Cramer that the rotation was prompted by the fact that some stocks just went down too much; investors got negative on the group, and they roared back based on the negative news. For once, it wasn't positive news that prompted them to rebound.
"Proof that this market goes into hate mode and only lets go when the disgusted holders have already sold, leaving behind a hardened shareholder base that can tolerate the pain," Cramer said.