Why the Nasdaq isn't worth worrying about

It is Fashion Week in New York City right now, and Jim Cramer thinks this is a good time to celebrate the hottest trends currently on the Wall Street "red carpet." Especially the semiconductor space, which is still pretty cheap in a market of overvalued stocks.

The hottest style right now is the cybersecurity stocks. And Cramer thinks this makes sense, ever since the CEO of Target lost his job because of a data breach.

Stocks like Cyberark Software and FireEye had immense revenue growth recently, which proved just how much CEOs are willing to spend to avoid being the next victim of a hack.

Additionally, domestic retail is on fire right now and the "Mad Money" host anticipates that it will keep burning. He has his eyes on TJX, Ross Stores, Nordstrom, Home Depot, Bed Bath & Beyond, Big Lots and Costco. And while analysts are backing away from these stocks as weaker oil plays, Cramer is standing his ground on them and thinks they will keep rallying.

"Now I'm not saying that all of these companies represent bargains. Fashion is, per se, not a bargain. Some of the cybersecurity stocks in particular are ridiculously overvalued. But right now it just doesn't seem to matter," said Cramer.

Read MoreCramer's hottest stocks on the market right now

Jim Cramer Mad Money
Source: CNBC

Another trending industry right now that is perhaps not as red carpet glamorous, are garbage stocks.

"The garbage business is on fire in this country, and unlike the smell of a real trash fire, I find the odor of a stock like Waste Management to be very pleasant right here," said Cramer.

When the economy improves, that means people are producing more garbage. This is good news for a stock like Waste Management, which has 252 active landfills and 300 transfer stations. It delivered an 8 cent earnings beat from a 59 cent basis on Tuesday, sending the stock up 5 percent.

Does the company think it will go higher, along with the economy? To find out, Cramer spoke with Waste Management CEO David Steiner.

"When you look at construction around the country, you see particularly in the chemical corridor…the reindustrialization America is coming back. We are perfectly positioned to take advantage of that," said Steiner.

Now Cramer thinks it is time for a little earnings education because it is seriously fishy when stocks such as Skechers and Columbia Sportswear report earnings and then shoot through the roof immediately following.

"The mystery of how these stocks can make major moves right in front of your eyes needs to be unlocked for you to understand how the stock market really works. Yes, it's really that important," said the "Mad Money" host on Tuesday.

There really are two reasons that hold the answer to these questions. Cramer's first reason is that both Skechers and Columbia did very well in the latest quarter, thanks to new product innovations and excellent sales.

The "Mad Money" host said that many hedge funds and brokerage research houses use different third-party information services in order to predict the health of a company and the direction of the stock.

The problem with these sampling services, according to Cramer, is that they have frequently underestimated sales and produced inaccurate results. Thus, the moves in both Skechers and Columbia last week were a result of hedge funds' desperately reaching for a stock to cover their short sales that were created due to faulty information.

Read More Cramer: The secret behind skyrocketing stocks

Farooq Kathwari, CEO, Ethan Allen
Scott Mlyn | CNBC
Farooq Kathwari, CEO, Ethan Allen

Speaking of trends, Cramer doesn't even need to look at a chart to know that tech stocks have been roaring recently. Even the semiconductor space has taken off, with the Philadelphia Semiconductor Index reaching highs that have not been seen since 2001.

"When people tell you that the Nasdaq is overvalued, I want you to look at the semis. Because they're actually still pretty darned cheap," said Cramer.

Can the semis keep roaring, and what is the best way to make money off of this trend? To find out, Cramer turned to Bob Lang, a technician and founder of ExplosiveOptions.net, as well as a colleague of Cramer's at TheStreet.com.

In order to take the pulse on a broad scope of the industry, Lang looked at the monthly chart of the Market Vectors Semiconductor ETF, or the SMH. Lang thinks this chart is important, as it shows how the semiconductors have been making their way higher and higher for years and have led the market since 2009.

Read MoreCramer: Roaring semis are just getting started

One stock that Cramer thinks could yield long-term growth, is Ethan Allen. This manufacturer and retailer of home furnishings had a rough quarter, when it announced an 8 cent earnings miss off of a 45 cent basis.

However Ethan Allen is in the process of changing more than 79 percent of its merchandise and renovating its stores, which could provide long-term turnaround efforts that will reward shareholders nicely.

Could the stock transform itself? To find out, Cramer sat down with Ethan Allen Interiors chairman and CEO Farooq Kathwari.

"We are going through another major reinvention…this is major because the world has changed. Today when you take a look at the world we have the impact of globalization and commoditization on one hand. We have the impact of human consumer attitude…Finally there is technology. All of these are making it for us to really go through the next reinvention," Kathwari said.

Five Below Inc: "There are so many retailers that I like, I'm not going to go for one that just missed and then missed. So I think we are going to say no go on this one, and I would rather be in Costco."

Raptor Pharmaceuticals Corp: "A small cap little guy. I've got some of the best ones like Regeneron and Celgene stalled. I'm going to put my chips on those two. I'd rather buy five shares of Regeneron."

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