What's really going on under the market's hood?

From a high level, one could think that the averages are finally at a stable level. However, Jim Cramer suspects that there could be more to the market than meets the eye.

That is why he opened the market's hood to take a closer look, and his resulting discovery could impact your portfolio.

There is a gigantic rotation of stocks happening right now. Cramer sees that the market leaders have decided to take a breather on the sidelines, while the idle bench warmers have decided to jump in the game and make some money.

"My goal here isn't to tell you go buy the cyclicals or sell the staples. My goal is to show you what's under the hood, and how the averages look like they're doing nothing, but underneath we have a rotation going on of immense proportions," the "Mad Money" host said.

This market has been led by the stocks of companies with little economic sensitivity. Stocks such as PepsiCo, Procter & Gamble and Biotechs such as Biogen, Celgene and Gilead have all rallied.

But now, the flows of funds have changed and these recession proof stocks have started to reverse. Cramer saw it on Wednesday as the consumer packaged goods plays, drug stocks and biotechs were taken to the wood shed. He considered this the first day of the changeover.

Looking under the hood
Luc Beziat | Getty Images

Why has this happened? These stocks have all had impressive runs based on the slowing global economy. That can only take them so far, and now they have stretched beyond their bounds of valuation. Additionally, when there is a bull market, the starting players will need to rest eventually and recover a bit.

There are a few catalysts behind this rotation. First, oil has started to bounce; it settled slightly higher on Wednesday. Second, those who follow cyclical stocks look for obscure data to positively correlate with the U.S. economy. Cramer is seeing good signals, such as when big truck orders surged back to levels not seen in eight years. Additionally, fantastic auto numbers were announced on Tuesday.

"I can't overstate their importance since the talk of the town among managers who were buying those staples was that we'd hit the peak of the auto cycle. Wrong! Anything auto related is just on fire," Cramer said.

The "Mad Money" host also saw an important shift within technology, because of the belief that the industrials are improving. There has been a run on Internet and social media stocks, which have been total dogs recently. Yet Hewlett-Packard, Micron and Cisco, have all had money flowing into them.

He also expects stocks like Boeing and Alcoa in the aerospace and defense cohort to pull some huge gains.

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Cramer also noted that it is important to keep an eye on employment numbers that will be announced on Friday. If they are weak, then he thinks it is possible that these gains could roll back.

"I know it seems mystifying, but it's time honored and recognized by so many professionals that I had to share the skinny with you before you decide to drop or add the players to your stock line-up as we enter the crucial last month of the season."

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