"Here's why: Almost all tech sell-offs get triggered by earnings shortfalls," the "Mad Money" host explained. On day one, a key company botches its earnings report, sending investors reeling.
Soon enough, the sellers emerge and analysts tackle all of tech with lower price targets and virulent downgrades, extending the selloff past the first day.
Then the money leaving tech starts flowing into household names like Colgate and Coca-Cola, and by day three, tech takes a breather and buyers settle in high-yield names that do well in a low interest rate environment.
However, this selloff was not triggered by any kind of shortfall or bombshell pre-announcement, Cramer said.
"All we got was a short-seller hollering about market-fave and Cramer-fave Nvidia and a large hedge fund sending back money that had been invested in a lot of FANG names," he said. "So there was no reason for the analysts to follow up yesterday with more downgrades. Because there was no actual shortfall. There was no tech massacre."
The cross-currents emerged on Tuesday, when the FANG stocks, Cramer's acronym for Facebook, Amazon, Netflix and Google, now Alphabet, did not get showered with praise by bullish analysts writing off the momentary pullback as Cramer expected.
"I expected to hear about new releases from Netflix, some virtual reality release from Facebook. I would've thought we would've gotten a number bump for Alphabet or Lam Research or Broadcom. But nope. We didn't even get a little love for Nvidia or a refutation of the Apple downgrade," the "Mad Money" host said.
The result? Scattered gains in some of the financial stocks in anticipation of the Federal Reserve's expected interest rate hike on Wednesday, accompanied by an uptick in the oils and a rise in some industrial names that may be looking ahead to strong earnings reports, Cramer said.
Oddly enough, the housing stocks also rallied, with Home Depot's stock jumping after a days-long downturn — an atypical move ahead of an expected interest rate hike, Cramer said.
"Before we tell ourselves that the tech selloff's over and we can go back to buying, we need to address a two-part conundrum in this rally," Cramer warned. "First, the tech comeback is anemic. There are plenty of techs that are still well below where they were on Thursday. If there really isn't more to the sell-off, then they should be higher."
"Second, the other rallies similarly lacked punch," he continued. "It was a grade-B, end-of-rotation action, not something seething, a strong comeback that gives us a real launching pad to higher prices."
All this could lead to one of three scenarios, the "Mad Money" host said. First, the Fed could issue some sort of surprise and send the tech stocks soaring back to their pre-selloff levels.
Second, the Fed could come out swinging and point to another interest rate hike, which would continue last week's rotation and boost the banks.
Third, the market could simply get hit across-the-board in response to the Fed meeting, leaving investors to sort through the mess on Thursday to find what really works.
"The bottom line? Today felt more like the end of a rotation, not the beginning of a new one, and without a fresh catalyst I can't see us lifting off from here, unless Fed chief Janet Yellen manages to say things are terrific, we need to raise rates, and then she turns out to be genuinely sanguine that the future is brighter than the past," Cramer said.
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