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The daily battle between the bulls and the bears has been taken to a new level Jim Cramer told the viewers of his "Mad Money" TV show Thursday.

He said there is a literal tug of war in the markets, with investors loving stocks as an asset class, while at the same time hating individual stocks.

Individual stocks are simply too risky, said Cramer. With most companies having reported what will likely be their last good quarter, Cramer predicted only pain ahead for most stocks. That's why investors are turning to safer alternatives.

There's only one way investors can invest in markets while not investing in individual stocks, and that's with the S&P futures, a basket that invests in all of the S&P500 names. This is exactly what large pension and mutual funds are doing, said Cramer.

Cramer confirmed that much of Tuesday's rally was caused by a state-run pension fund, which is obligated to invest the monies they receive, investing heavily in the S&P futures.

He used US Steel ( X) to illustrate the tug of war in the markets.

U.S. Steel, said Cramer, should have gone lower after the company reported its earnings and received downgrades from analysts. Yet the stock held its own, as the futures markets continued buying into U.S. Steel, along with the rest of the S&P index.

Cramer called the disconnect between the fundamentals and the futures mind boggling. He predicted the trend would likely continue through the rest of the year, or until investors finally gain confidence in individual names.

Cramer: Analysts Got Comcast Wrong

Another Look at Gold

Cramer talked with Sean Boyd, CEO of Agnico-Eagle Mines ( AEM) to find out why gold hasn't been the safe haven he had predicted.

Since Cramer recommended Agnico at $68 a share, the shares have tumbled 58% to $28. "I got this one wrong," he said.

He said that in order for gold to work in this environment, there must be inflation, and not the rampant deflation seen in commodities and home values.

Cramer said the decline in gold and gold stocks has further been accelerated by the credit crisis, with more jewelry stores pairing back inventory due to credit concerns.

Boyd, though, painted a different picture. He said Agnico is just beginning to ramp up production and is still on target to raise output by 23%.

He said he company will open five new mines between 2008 and 2010, with the first of those due to start operations this quarter. Boyd's confident the investments will pay off because Agnico factored in much lower gold prices when it decided to invest in the new mines.

When asked about the company's dividend, Boyd said Agnico has paid a modest one for the past 23 years. He noted the difficulties in paying such a dividend in such a capital intensive business.

Cramer said he likes Agnico's story and the outlook for gold, but admits he may have been a full two quarters ahead of the ramp-up in gold stocks.

Stockpickr

In Wal-Mart's Cross Hairs

In the Thursday "Sell Block" segment, Cramer added Petsmart ( PETM) to the list, saying the company could now be in the cross hairs of retail giant Wal-Mart ( WMT), a stock which he owns for his charitable trust Action Alerts PLUS .

BankingMyWay

"When Wal-Mart decides to compete in a category, the competitor gets smoked," Cramer said. He cited the company's recent conference call, where it was briefly mentioned that Wal-Mart could be expanding its pet supply and pet car offerings.

Cramer said Wal-Mart has a long history of moving into product categories and decimating its competition.

When the company moved into organic foods, Whole Foods ( WFMI), felt the pinch.

It happened again when it expanded its electronics offerings, with both Best Buy ( BBY) and Circuit City ( CC) getting squeezed.

And drug stores are now feeling the pain as Wal-Mart rolls out phase three of its prescription drug plan.

"Anyone in Wal-Mart's cross hairs is in trouble," said Cramer. He said Petsmart cannot compete, despite its 1100 stores and 13% market share in the pet supply business.

The issue, he argued, is the company's supply chain, which involves many layers that Wal-Mart can simply eliminate to save costs.

He predicted only harder and harder times for Petsmart.

Mad Mail

In this segment, Cramer told a viewer that younger investors should have a mix of growth stocks and some conservative stocks in their portfolios.

Cramer told a second viewer that he's still behind Johnson & Johnson ( JNJ), despite recent negative comments from analysts.

Lightning Round

Cramer was bullish on Nike ( NKE), State Street ( STT), Coach ( COH), Schering-Plough ( SGP) and Abbott Laboratories ( ABT).

He was bearish on Mosaic ( MOS), Under Armour ( UA) and Philips Electronics ( PHG).

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Read more of Cramer's Mad Money Lightning Round insights.

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At the time of publication, Cramer was long Wal-Mart, Abbott Laboratories.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of TheStreet.com or its affiliates, or CNBC, NBC UNIVERSAL or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither TheStreet.com, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or TheStreet.com is related to the specific opinions expressed by him on "Mad Money."

None of the information contained in "Mad Money" constitutes a recommendation by Mr. Cramer, TheStreet.com or CNBC that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. You must make your own independent decisions regarding any security, portfolio of securities, transaction, or investment strategy mentioned on the program. Mr. Cramer's past results are not necessarily indicative of future performance. Neither Mr. Cramer, nor TheStreet.com, nor CNBC guarantees any specific outcome or profit, and you should be aware of the real risk of loss in following any strategy or investments discussed on the program. The strategy or investments discussed may fluctuate in price or value and you may get back less than you invested. Before acting on any information contained in the program, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.

Some of the stocks mentioned by Mr. Cramer on "Mad Money" are held in Mr. Cramer's Action Alerts PLUS Portfolio. When that is the case, appropriate disclosure is made on the program and in the "Mad Money" recap available on TheStreet.com. The Action Alerts PLUS Portfolio contains all of Mr. Cramer's personal investments in publicly-traded equity securities only, and does not include any mutual fund holdings or other institutionally managed assets, private equity investments, or his holdings in TheStreet.com, Inc. Since March 2005, the Action Alerts PLUS Portfolio has been held by a Trust, the realized profits from which have been pledged to charity. Mr. Cramer retains full investment discretion with respect to all securities contained in the Trust. Mr. Cramer is subject to certain trading restrictions, and must hold all securities in the Action Alerts PLUS Portfolio for at least one month, and is not permitted to buy or sell any security he has spoken about on television or on his radio program for five days following the broadcast.

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