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NEW YORK ( TheStreet) -- No, the market is not nuts, it's just trading on expectations. That was Jim Cramer's lesson to "Mad Money" viewers Thursday as he tried to explain the market's positive reaction to bad news and its bad reaction to good news. Cramer said the notion of expectations may make the markets seem impossible to understand, but once you grasp the theory it makes as much sense as two plus two. So why did shares of Wal-Mart ( WMT) blow up after the company beat the estimates and guided higher? Because that's precisely what Wall Street was expecting the company to do, which was very disappointing to the bulls who wanted more. The opposite is true for Cisco ( CSCO). Wall Street was expecting to hear the same old commentary from the network equipment maker but instead got a rosy outlook and a 75% boost in the company's dividend. Exciting indeed, enough for a 9.6% pop in the stock. Even more bizarre was reaction to Sears Holdings ( SHLD), the all-but-deceased retailer that reported its usual decline in revenue and same-store sales, but behold!, its gross margins actually expanded, sending shares up 6.5%. Other stocks in similar situations included NetApp ( NTAP), generic drug maker Perrigo ( PRGO) and pet superstore Petsmart ( PETM), which had a great move up today. Cramer said once investors understand expectations, the markets make a whole lot more sense.