The bulls finally found their footing Wednesday, prompting the averages to end in the green. But Jim Cramer was still suspicious, wondering if investors just saw a successful re-test of lows, or was it the calm before the next storm? Did investors really have a moment of rationality, or were the sellers just exhausted?
Those were all four reasons why the market could experience an up day, and Cramer was determined to find out which one helped to explain the rebound.
When the entire market goes down viciously and then rallies back to where it was before, most technicians will expect a retest. Meaning, they expect the market to retreat back to its previous lows seen before the rally. And while Cramer is a fundamentalist at heart, he likes to pay attention to the technicals in order to figure out when he will have a chance to buy stocks.
In Cramer's research, many lows were previously reached last Monday and Tuesday so he fully expected those levels to be revisited again.
But guess what? Despite how hideous the market was on Tuesday, only 77 stocks took out their lows from last week. So by the end of Tuesday, Cramer realized many chartists were going to react positively that stocks had so many few lows and would feel ready to buy. Sure enough, technicians seized control on Wednesday and the averages snapped back.
Another gauge that Cramer likes to use is sentiment. He first looked at the Standard & Poor's proprietary oscillator, which measures how overbought or oversold the market is. Then he looked at the Investors Intelligence bull-bear poll of newsletter writers.
Neither was perfect. The oscillator indicated the market was completely oversold, but considering circumstances are not as dire as they have been in the past, Cramer interpreted that as a sign to do some buying.
Until approximately four months ago, biotech stocks were one of the hottest groups out there in the stock market. This included the sizzling small development-stage biotech, as investors were drooling over bountiful mergers and acquisitions that propelled the group higher.
However the group went into free-fall in the spring and biotechs were slammed hard, making the smaller biotechs very difficult to own, especially since many have no actual products or profits. And Cramer has seen that when traders and investors get freaked out in a bear market, there is really nothing that can put a floor under these stocks.
"I always tell you that speculating on early-stage biotechs is a risky business that is not for the faint of heart, but after one of these stocks has been put through the meat grinder, at what point does it make sense to start shopping for bargains?" Cramer asked.
That is why Cramer decided to take a closer look a Puma Biotechnology, an early-stage biotech that was smoking hot until it took a nose dive this year. Puma came on to investor radars from the strength of a single drug called Neratinib, an anti-breast cancer therapy that could have multiple applications for other types of cancer.
"Given the treacherous nature of this market, I think the risk far outweighs the reward, the fundament of all stock investing. If Puma had any other drugs in the pipeline, it would be an easy call. But doesn't and that's what controls," Cramer said.
Ultimately, Cramer advised investors who do want to speculate on the stock to wait for it to come down to $80. And if it doesn't come down to that price, then just take a pass. There are plenty more stocks out there with less risk and more reward.
However even with Wednesday's positive action, Cramer found it hard to find many stocks that were anywhere close to their 52-week highs. H&R Block is the nation's No. 1 tax preparation firm, was one of them.
The stock roared after the company reported a terrific quarter on Tuesday, with H&R Block delivering a smaller than expected earnings loss and higher than anticipated sales. Additionally, investors learned that the company finally completed the sale of its banking business a month ahead of schedule.
Now that the bank is gone, the company began buying back stock hand over fist, announcing a $1.5 billion buyback on Wednesday.
Even after the rally on Wednesday, does this stock have more room to run? To find out, Cramer spoke with H&R Block's CEO Bill Cobb.
"We were sitting on about $1 billion of trapped capital, excess capital, from really the regulations being imposed by the Federal Reserve. We felt with our shareholders we should come right out and get that capital back to them," Cobb said.
This market has now become so crazy, that Cramer can now equally divide each day into three distinct trading sessions. At this point, every session isn't just one session. It's three!
"Every day feels like not one session, but three sessions and that's adding to the pervasive sense of confusion," the "Mad Money" host said.
The first session occurs at the opening bell, and is driven from the data and stock market action in China and Europe. The futures now completely control the morning session, and Cramer has seen the same pattern over and over again.
The second session takes place at approximately 11:30 a.m. ET every day and is entirely dictated by sellers. Cramer called this the "margin session" because it is driven by speculative traders who have borrowed money from their brokerage firms on margin.
The final ETF session kicks in at approximately 2:45 p.m. ET each afternoon when exchange traded funds have to settle up. When someone buys an ETF that bets heavily against stocks, it settles up by knocking down the stocks. The same thing occurs with a bullish ETF, as they use leverage to magnify their influence.
So with three sessions of trading each day, what do these sessions have in common?
None of these sessions has anything to do with individual stocks or the underlying fundamentals of a company. For now, the old fashioned methods of trading have been thrown out the window. Instead, it has created a new world of futures, margin and ETF dominance.
Cramer is also always on the lookout for game-changing technologies that could change the face of an industry, especially in the world of health care. Telehealth has introduced a new way of doing business, by basically using the internet to videoconference with a doctor instead of visiting the doctor or hospital everyone someone gets sick.
A fast growing major player in the telehealth group is Doctor on Demand, a privately held company that has given its competitor Teladoc a run for its money. In addition to Doctor on Demand's major partnership with United Health Care, it announced a deal with CVS Health that could potentially refer millions of new patients to its service.
Doctor on Demand also just reached an agreement to become the preferred telehealth service provide to Blue Cross Blue Shield of Minnesota, which has approximately 2.6 million members.
Could these two help Doctor on Demand crush the competition? To find out, Cramer spoke with its co-founder and CEO Adam Jackson.
"Those two deals are giving us really more of the same, more great stuff. It is exposing the Doctor On Demand service to literally tens of millions of CVS shoppers. They are an incredibly well-trusted brand in retail health care," Jackson said.
In the Lightning Round, Cramer gave his take on a few caller favorite stocks:
Tesla Motors: "Elon Musk is a great stock manager as well as a great car maker. If you like the car and you want to own the stock, I'm never going to go against you."
Linn Energy: "At this point, you are just going to hold on to it, and maybe you'll get a bounce. But they have screwed it up. They took on too much debt, they did it wrong. What can I say? They did it their way—the wrong way."