Many people are expecting subpar results for Apple and are ignoring its dividend and very large cash position, said Cramer, co-manager of the Action Alerts PLUS portfolio, said on CNBC's "Mad Dash" segment. Apple is a long-time AAP holding.
The market is simply focusing on the short term, Cramer added. But it's not just about Apple, he said -- investors are ignoring companies with in-line or even above-consensus earnings. If companies miss on earnings, however, investors aren't afraid to punish them.
So if Apple falls short on earnings, you could see similar action. Cramer noted IBM (IBM) said everything investors should have wanted to hear during its conference call and even beat on revenue and earnings estimates. Its shares are down around 5%.
It seems likely the S&P 500 -- currently trading with a P/E ratio of 16 -- will see that ratio fall to 15, Cramer reasoned. One by one, stocks are breaking through their August lows.