Jim Cramer is used to seeing negativity in the stock market, but sometimes there is too much. The first is poison, and the second is the antidote.
"That is my summary of what is bubbling up underneath in what has suddenly become a very treacherous market," the "Mad Money" host said.
So what the heck happened?
It was a very discouraging day for the bulls, because there was a bizarre combination of company prospects fading at the exact same time as Federal Reserve officials talking about the need to raise rates.
"With oil once again about to challenge the $40 level, who would think that lots of Federal Reserve officials would decide that this is the moment to preach about the need to be vigilant against inflation? I'm sorry, what inflation? I see deflation almost everywhere, except in wages," Cramer said. (Tweet This)
However, Cramer does acknowledge that the Fed will eventually need to tighten in order to curb inflation. With this in mind, there is a specific test that Cramer uses to assess whether the stock market—not the economy—can handle a rate hike without being crushed.
The test? Cramer asks: If a rate hike were to happen, would it derail all the good things happening in the economy?
In the current environment with commodities tanking and prices coming down for many goods, Cramer doesn't think investors need to be worried about inflation.
"No, you should be fearful that our economy is flashing too much weakness for it to be able to handle a rate hike," Cramer said. (Tweet This)
Unfortunately, Cramer did not hear those concerns voiced by Fed officials on Thursday.
Read more from Mad Money with Jim Cramer
Another group of stocks that Cramer thinks could work in this environment are those that reflect too much negativity and could be bought either for trade or an investment.
Those include Kohl's, General Mills, Kimberly-Clark, and pharmaceutical companies.
"From now on we must accept that stocks are going to be punished by Fed chatter, no matter what happens with commodities or the averages or even the data, because the Fed wants to raise rates," Cramer added.
That means Cramer has a new approach—look for stocks that have been punished because of mistaken group-think. When he sees the capital punishment hitting the stock, he will point it out before it rebounds. It's a harder way, but it could work.