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It's an irrational time for the stock market, Jim Cramer told his Mad Money viewers Thursday. One day everything gets slaughtered, but the next the buyers turn trash back into treasure.

Case in point: Wednesday's collapse in Macy's (M - Get Report) , which took down the entire retail sector, including great names like Home Depot (HD - Get Report) and Ulta Salon (ULTA - Get Report) . Even some restaurants including McDonald's (MCD - Get Report)  felt Macy's pain yesterday.

The same commoditization applies to the upside, Cramer continued, with blowout earnings from Jack in the Box (JACK - Get Report) sending that company's shares up 15%, taking the stocks of Domino's Pizza (DPZ - Get Report) , Yum! Brands (YUM - Get Report) and Darden Restaurants (DRI - Get Report) , along for the ride.

Technology continues to be under pressure, as more negative chatter sent Apple (AAPL - Get Report) shares lower. Cramer said this stock, which he owns for his charitable trust, Action Alerts PLUS, won't see a bottom until analysts begin downgrading it.

There is one thing that's working, Cramer concluded, and that's takeover rumors, which sent shares of seed maker Monsanto (MON) up 8.3% and Kellogg (K - Get Report) higher by 1.5%.

The Slow Death of Retail Stores

With the disastrous earnings from Macy's, Kohl's (KSS - Get Report) and Nordstrom (JWN - Get Report) , is it time to finally declare that bricks-and-mortar retail is dying a slow death? According to Cramer, the answer might be yes.

Cramer said the big retailers are in the same position that newspapers were in a decade ago. Both industries saw the Internet coming, but both initially thought they were special and immune. Then they reluctantly joined the party, only to drown in the riptide.

Cramer recalled a trip to the headquarters of Borders Bookstore years ago, where executives wouldn't even acknowledge that Amazon.com (AMZN - Get Report) was a threat. At the time, the booksellers felt that experience mattered. They neglected to take into account that people didn't have time to drive to a store and browse, which made Amazon the more convenient choice.

In the case of Nordstrom, the company often cites that its excellent customer service, with personal suggestions and generous return policy, is what keeps customers coming into the stores. But Amazon's return policy is just as generous, and its personal recommendations are second to none.

So are the retailers going the way of your local newspaper? It's too early to tell, Cramer concluded. But it is safe to say that a return to the glory days of the department store is highly unlikely.

Whole Foods Rising

When your stock has been down for so long, even doing one thing right is enough to send shares soaring. That's exactly what happened with Whole Foods Market (WFM) , which saw shares rally 6% when it reported a 3-cents-a-share earnings beat, while rival Sprouts Farmers Market (SFM - Get Report) saw its share plunge 7% on a 1-cent-a-share earnings beat.

Did these two stocks trade places, or did the expectations change? Cramer said that while Whole Foods saw declining gross margins and a 3% drop in same-store sales, the stock was near its lows, allowing the hype about the company's new smaller-format stores to spark a rally.

As for Sprouts, this grocer saw expanding gross margins and a rise in same-store sales. But with shares up 3% for the year, they were ripe for a selloff on what was perceived as slower days ahead.

Cramer said Whole Foods is still a turnaround story, but in the short term the stock will likely be choppy. Sprouts, on the other hand, may be seeing increased competition, making its continued growth suspect.

Watch Those Falling Knives

Don't try and catch a falling knife, Cramer warned viewers as he took a look at the medical waste disposal company Stericycle (SRCL - Get Report) . He said this stock had a picture-perfect run from its initial public offering in 1996 through October of 2015. Then everything fell apart, with the stock falling 40% in six months, erasing over three years of gains.

What made Stericycle great, Cramer said, was its consistent growth, which was compounding at 16% a year. Stericycle is a roll-up company, a serial acquirer of other companies. It has purchased a total of 442 companies since coming public, or about 19 deals a year.

But then in 2015, Stericycle acquired a document disposal company, Shred-It, for $2.3 billion. While the deal was touted as being additive to earnings with plenty of tax benefits and synergies, the deal's closing also marked the high point for the stock.

It turns out Stericycle's gross margins had been eroding throughout 2015, down to 34% from 45%. Then the company posted a rare 11-cents-a-share earnings miss in October, followed by a second miss of 4 cents this past April. But what really did shares in, Cramer said, was the company's lowered guidance for all of 2016 and its commentary that the Shred-It acquisition will not realize the promised synergies this year.

Trading at 17 times earnings, Cramer said Stericycle may seen attractive, but investors need to stay away as management has clearly lost its way.

Lightning Round

In the Lightning Round, Cramer was bullish on Match Group (MTCH - Get Report) , Public Storage (PSA - Get Report) , Fiserv (FISV - Get Report) and Broadcom (AVGO - Get Report) .

Cramer was bearish on Mobileye (MBLY) and LogMeIn (LOGM - Get Report) .

Am I Diversified?

In the "Am I Diversified?" segment, Cramer spoke with callers and responded to tweets sent via Twitter to @JimCramer to see if investors' portfolios have what it takes for today's markets.

The first portfolio included Ford (F - Get Report) , Activision Blizzard (ATVI - Get Report) , Pfizer (PFE - Get Report) , CSX (CSX - Get Report) and Alcoa (AA - Get Report) .

Cramer called this portfolio "perfection."

The second portfolio's top holdings included Ford, AT&T (T - Get Report) , Excelon (EXC - Get Report) , Facebook (FB - Get Report) and Johnson & Johnson (JNJ - Get Report) .

Cramer also blessed this portfolio as properly diversified.

The third portfolio had FireEye (FEYE - Get Report) , Cognex (CGNX - Get Report) , Sucampo (SCMP) , Apple and Verizon (VZ - Get Report)  as its top five stocks.

Cramer said this portfolio had a lot of tech, but the tech was diversified enough to make the grade.

To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.

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At the time of publication, Cramer's Action Alerts PLUS had a position in AAPL and FB.