TheStreet.com TV Recap: Bowling for Pin Action

One of the reasons there is a lot of "pin action" from stocks reporting earnings today is that expectations for the companies are so low, Jim Cramer said on TheStreet.com TV's Wall St. Confidential Web video Tuesday.

"When we hear anything good [about one company] we realize that the expectations have been ratcheted down for a whole industry," Cramer told Gregg Greenberg, the host of Wall St. Confidential.

Pin action is when good news from one company lifts others in a sector, or others that do business with those companies.

In Black & Decker's (BDK Quote - Cramer on BDK - Stock Picks) case, there was a "big inventory glut," Cramer said. But now that it appears the glut has been relieved for Black & Decker, "it's pretty reasonable to expect it's been relieved at the Sears (SHLD Quote - Cramer on SHLD - Stock Picks) Craftsman level, too."

Going back to Sears' year-ago quarter, Cramer said it is "very clear" the retailer's Craftsman outdoor/hardware division is the one that was hurt the most.

Moreover, Matthew Fassler of Goldman Sachs upgraded Best Buy (BBY Quote - Cramer on BBY - Stock Picks) on Monday "with the hopes that we've caught a bottom in durable goods purchases," he said.

When market-players overlay Best Buy on Sears, there's some pin action, and when they put the Craftsman overlay with Black & Decker, there's more pin action, Cramer said.

Further, when people realize that the retailer's clothing business had been doing "very well," Sears becomes a story that was supposed to be trapped between $185 and $190, but instead "may be breaking out here," he said.

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