Often Cramer sees random or stupid moves and he thinks the market is irrational. But the kind of stock rotation Cramer has seen these past few days is something completely different. This is more of a seasoned playbook rotation that works the same way every time like clockwork because of the mindset of big money managers.
For instance, hedge fund managers are more concerned with fast money and take action quickly. They reach for the growth stocks with the most risk, such as Celgene, Regeneron and Amazon. They can handle a possible downside and will jump ship the minute the economy starts to accelerate again. That is why there is always a rally in high-growth stocks the day after investors think there is a slowdown.
Then there is mutual fund money, which is a very different animal. They make strategic decisions. Portfolio managers meet, discuss, kick around ideas and mull over it. Then they meet again, and collectively decide what companies could have good growth in a slowing environment.
Mutual funds will start to buy food and drug companies and consumer packaged goods plays; again, PepsiCo and Kraft are winners, along with Eli Lilly.
Read more from Mad Money with Jim Cramer
Cramer Remix: The reason why the market rallied
Theranos CEO fires back at WSJ: I was shocked
Cramer: Enjoy the rally. It's only temporary
"In a slowdown, we'll get a decline in interest rates. Unlike those high-risk, high-reward growth stocks the nimble traders loaded up on yesterday, these consumer staple companies have sky-high dividends that give you a much better yield than the bond-market competition," Cramer explained.
And that is exactly how a rally occurs, like it did on Friday.
Cramer thinks it really is that simple, which is why investors should now be able to play the slowdown to their advantage.
"These are trade secrets — no hedge fund or mutual fund wants the public to know their strategies because it would cut into their profits," Cramer said. (Tweet this)