Jim Cramer saw a change of control in the marketplace; it is no longer led by regular investors. The short sellers have stepped up to the plate to take charge — and believe it or not, Cramer was happy about the development.

There are gigantic bets being made against stocks at all times. When those bets work, they work big. And when they fail, it is spectacular. But sometimes the best move to figure out what is going on is to follow the short sellers.

The term short selling refers to investors who sell a stock that they have borrowed or do not own. It is motivated by the belief that the price of the stock will decline, and they can buy it back at a lower price and make a profit.

"In the last 24 hours, we have witnessed some of the greatest short gains I have ever seen as well as some downright disastrous bets against companies that managed to produce herculean results against all odds," the "Mad Money" host said. (Tweet this)

The reason why Cramer has no problem with the short sellers? Because they expose frauds and faults. That is the group that makes money when a company falters or investors freak out and sell a stock for the wrong reasons. On the flip side, short sellers also lose money when a company's story is stronger than expected and they are forced to buy back shares to cover their short, sometimes for more than what they sold them for.

Thursday brought evidence of short sellers with bets that had gone bad, which created major wins for investors holding the long position. Alphabet and Amazon were perfect examples of this, as both companies have had inconsistent earnings, which made them the ideal target for short sellers. Much to the short sellers' dismay, both companies crushed earnings.

In the last few days Cramer has heard rumblings of short tellers attacking FANG, an acronym for the growth stocks of Facebook, Amazon, Netflix and Google.

"Well, guess what: Netflix may have failed to deliver, but the A and the G are roaring in after-hours trading, and so is Facebook, right on the backs of the short sellers. These are monster moves that are already sending up the futures for tomorrow's session," Cramer said.

Cramer also noted various other groups that were bolstered by the short sellers such as the banks, industrials, consumer packaged goods, and old tech stocks.

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"This market has been turned on its head, with what looked like fabulous shorts turning into magnificent longs, and vice versa," Cramer said. (Tweet this)

The action all stemmed from the massive rotation of stocks that Cramer has warned about all week, not actual numbers, which explains some of the massive moves seen in the market in the past three weeks.

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