• CNBC's Jim Cramer on Tuesday reviewed Tuesday's declines, saying this action doesn't indicate a market bubble, but that stocks may be hitting their tops.
• "Toppy" action may not be great, Cramer said, but it's "much less devastating than a burst bubble."

CNBC's Jim Cramer on Tuesday reviewed Tuesday's declines, saying this action doesn't indicate a market bubble, but that stocks may be hitting their tops.

"Toppy" action may not be great, he said, but it's "much less devastating than a burst bubble." The latter occurs when stocks climb to new highs and then fall back, while the former refers to when stock prices exceed the fundamental value of their companies.

"We start off weak, and then unlike much of the time since the market began to rally in November, we actually then finish even lower. It had been the opposite pattern — some stocks manage to buck the trend, of course, but most can't. That's toppy," Cramer said. "Bubbly action, on the other hand, is when you go straight up and then straight down, with the only respite being wild short squeezes on the way down."

On Tuesday, the Nasdaq Composite fell by 1.65%, the Dow Jones Industrial Average pulled back 1.04% and the S&P 500 dipped 1.02%.

Cramer pointed to several scenarios that are making this market seem "toppy," including Apple and Tesla, both of which are facing problems internationally. Tesla's seeing poor sales in China, Cramer said, and the competition from Chinese electric vehicle makers is stiff. Even though he said he still believes Apple is a good stock to buy for the long term, its business in China may also be weak. iPhone sales in China plunged 24% in the first six weeks of 2024, according to one analyst report.

Stock moves from Super Micro Computer also seem "toppy," Cramer said. The stock has shot up over the past several weeks, doubling since the end of January, according to FactSet. It also popped more than 18% on Monday after the company was selected to be a apart of the S&P 500. Cramer called this kind of action "idiotic," and said Super Micro Computer is the frothiest stock in the market .

"Toppy action ends only when they get to everything and everyone — and that does include Nvidia, even as I can't think of a reason for it to come down," he said. "And that's the real oddity— it doesn't matter. When the market gets toppy, nobody needs a reason to knock down high-flying stocks."

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Disclaimer The CNBC Investing Club Charitable Trust holds shares of Apple and Nvdia.

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