Cramer: Don’t Misread Goldman’s Apple Downgrade

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On Wall Street, pros are buzzing about Goldman's decision to take Apple off its Conviction Buy List. Cramer, however, has a word of caution; don't jump to the wrong conclusion, he says.

That is don't think it's a sign of the bottom. According to Cramer, it's not.

"The bad news here is that there are some 60 firms who follow Appleand 5/6ths of them still are recommending it," Cramer said.

And that's just far too many firms remaining bullish for Cramer to call a bottom.

"For a bottom, the negativity needs to reach a crescendo level," Cramer explained. "I need to see Barclays, Bernstein, Oppenheimer, Cowen, Raymond James, JP Morgan, Deutsche Bank, and most importantly, long-time bull Piper Jaffray lower the boom on the company," said Cramer before the sentiment shift becomes significant.

Without that, Cramer thinks the path of least resistance will remain lower. That's not to say the downgrade isn't a step toward a bottom – it probably is.

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"We are starting to get that key disgust factor," said Cramer, but only starting. Cramer thinks a lot more disgust is needed. Nonetheless, "The Goldman downgrade is certainly part of the process," he conceded.

Apple Inc.
Adam Jeffery | CNBC

But, "As long as the stock stays in the low $400s, and not the $300s, where people will be afraid to downgrade because of the cash position, this stock is still fair game (for the shorts)."

All told, Cramer remains cautious of Apple.

"I'd like to give you the all-clear on Apple but I can't," he said. However Cramer does think developments are worth monitoring.

"The big hatred is now game on. Watch for analysts to break ranks, cut numbers, and, say how disappointed they are in management. When sentiment gets that negative, then and only then, will it be safe to buy again."

Call Cramer: 1-800-743-CNBC

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