Jim Cramer diagnosed the stock market with a case of the "wacky bids underneath" on Wednesday.
A bid underneath is a technical term used by money managers, which means that as a stock sinks, buyers are on the sidelines and ready to do some buying. Often an institutional trader will ask for a "picture" to figure out what the actual supply and demand balance is before buying a stock.
"Ever since the Trump rally began, there have been buyers lurking underneath. They remain, even when the S&P 500 futures might drive stocks down off of whatever ails the market on any given day. They prop up the stocks that they are lurking under," the "Mad Money" host said.
However, once the patience wears off, the buyers step up and end up competing with one another and the price of the stock rises. Cramer attributed the lurking buyers underneath propelled stocks like Disney, Starbucks and NVIDIA on Wednesday.
Cramer was also stunned by short-sellers of Caterpillar, who thought nothing would get better for that company, especially with a strong dollar. However, now that Trump will be in the White House, his plans for infrastructure spending could include using American-made equipment.
"Post-Trump, CAT is widely hailed as the stock to own," Cramer said.
Cramer can't speak for the American public, but he knows many business owners are sick and tired of Washington getting in the way.
They are tired of complicated new rules, changes to health care policy and taxes that make them want to export jobs overseas to produce goods more cheaply. These rules have caused them to fear expanding business entirely in some cases.
"The stocks of small capitalization companies are rallying because these companies are the ones that can least afford the endless rules and regulations that the Obama administration has put out," Cramer.
Donald Trump's stunning victory for the White House triggered a massive rotation in stocks, and Cramer warned that investors have overreacted on private prison operators and gun makers.
"After Trump's surprise victory, the private prison stocks roared higher, but I don't think a Trump presidency fixes their long-term problems," he said.
Prison stocks rallied harder than any other group after Trump won, as both President Obama and Hillary Clinton disliked the for-profit prison business. On the other hand, gun makers were slammed, as typically gun sales surge when a Democrat wins the presidency as customers try to buy weapons before more restrictive gun laws are passed. Given the Republican sweep that occurred, the same urgency was not there.
"While there is some logic behind the rally in the private prison names and hideous decline in the gun makers, I feel like this is a case where you don't want to you take your cue from the crowd's immediate reaction, because for me it feels very short-sighted," Cramer said.
In the age of businesses all embracing the digital world, even education has started going digital. Chegg is a company that has managed to transform itself from a textbook rental company into a provider of digital services for students.
Services range from online homework help to assistance with picking colleges, getting scholarships and selecting classes. Last week, Chegg reported one of its final quarters before the transition was complete and delivered higher-than-expected revenue and a smaller-than-expected loss.
"Every business is being transformed. Education has taken a long time to do it, but when you look at what is going on today, which is the demographics and the socioeconomics of the student today is different," Chegg's CEO Dan Rosensweig said.
While many technology stocks have fallen out of favor recently, Wix.Com has more than doubled in 2016, up 70 percent in the past five months.
Wix.Com is the cloud-based web design company that helps individuals and businesses create their own websites. Wix.Com was able to steer clear of the rotation out of technology last week because it reported a very strong quarter on Thursday.
Wix.Com's co-founder and CEO Avishai Abrahami told Cramer that he thinks the company will continue to grow from its 94 million users.
"We are growing very fast. I think that the more that you get the product better, and the more the internet becomes part of our life, then there is just more room to grow," Abrahami said.
In the Lightning Round, Cramer gave his take on a few caller favorite stocks:
Church & Dwight Co: "It is out of favor because people want to own these big industrial cyclicals. They think the economy is going to get better. That's when they throw away Church & Dwight, and that's when we put Church & Dwight away. Buy buy buy a little bit on the way down, because you are absolutely right about it's long-term forecast."
Himax Technologies: "Way too high risk. We are not going to go there. I have seen that company miss a bunch of times. If we want integrated circuits, we are going to go with Broadcom."