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This rally is not supposed to be happening, Jim Cramer told his Mad Money viewers Thursday. But when investors get scared and the short-sellers get caught leaning the wrong way, that's a recipe for explosive moves to the upside.

It's hard to believe that just a week ago, the E.U. looked like it would remain intact. So it's not surprising that after the big declines on Friday and Monday that the markets would be due for a bounce. What is surprising, however, is that bounce still continues for a third day in a row.

Cramer said a lot of the market's rebound can be attributed to short-sellers getting caught on the wrong side of the trade. They expected, for example, that travel would be severely curtailed after Brexit, but after Wednesday's takeover bid for Diamond Resorts (DRII) , the travels stocks were off to the races and haven't looked back.

Then today we learned Lion's Gate Films (LGF) is buying Starz (STRZA) and food giant Mondelez (MDLZ - Get Report) is interested in Hershey (HSY - Get Report) . Even with Hershey rejecting the bid, shares soared over 16%.

That's how a rally gets legs, Cramer concluded. Stocks get cheap, companies start buying and the shorts are forced to cover their losses.

Executive Decision: Rob Sands

For his "Executive Decision" segment, Cramer spoke with Rob Sands, president and CEO of Constellation Brands (STZ - Get Report) , the wine and spirits maker that just posted a 2-cents-a-share earnings beat on a 15% rise in year-over-year revenue. Shares of Constellation popped 3.7% on the news and are up 17% since Cramer last checked in seven months ago.

Sands said that consumers continue to vote with their feet, buying up more and more of Constellation's fantastic brands. He said the company had 60% growth in its craft beer, Ballast Point, while the new 24 ounce cans of Pacifico are growing.

Sands said Constellation has "a lot of shovels in the ground," building several new breweries, including the world's largest brewery in Mexico, to help meet growing demand.

Success is not a given, however, as Sands noted that Constellation is well-oiled machine that includes a terrific sales team. Even in the red-hot tequila market, their luxury brand, Casa Noble, is now the fastest-growing tequila around.

Hungry for Food Stocks

Takeovers will be the backbone of the second half of 2016, Cramer told viewers, and nowhere will that be more evident than with the food stocks.

Food stocks, Cramer explained, can only grow via acquisitions because there are only so many aisles in your local supermarket. Sure, they can spend their way to better placements or run promotions but for a food stock to really grow, they need to acquire another food company and then cut costs.

That's why today's rejected bid for Hershey sent shares soaring, as there aren't that many food stocks to go around. Cramer said he remains bullish on General Mill (GIS - Get Report) for its move towards natural and organic foods and also Whitewave Foods (WWAV) , Action Alerts PLUS holding.

Executive Decision: Marty Mucci

In his second "Executive Decision" segment, Cramer spoke to Marty Mucci, president and CEO of Paychex (PAYX - Get Report) , a stock that roared 6% Thursday after the company reported 9% revenue growth. Shares of Paychex currently yield 2.8%.

Mucci said all of the company's products are really resonating with customers, including payroll, HR and 401(K) services. Customer retention is also at a record high and customers are using more of Paychex' services than they have in the past.

Mucci continued that with new regulations such as the new overtime rules, tracking employees' time and paying them at the right rates is more important than ever, which is why the new Paychex mobile app allows employees to clock in and out right on their phones.

When asked about the company's dividend, Mucci noted shareholders expect consistency from Paycheck and he plans to continue to deliver both growth and yield for shareholders.

Lightning Round

In the Lightning Round, Cramer was bullish on Visa (V - Get Report) , Flextronics (FLEX - Get Report) , Novartis (NVS - Get Report) , Wynn Resorts (WYNN - Get Report) , Medivation (MDVN) , Valley National Bancorp (VLY - Get Report) , Bristol-Myers Squibb (BMY - Get Report) and Travelers Companies (TRV - Get Report) .

Cramer was bearish on Sarepta Therapeutics (SRPT - Get Report) , Cliffs Natural Resources (CLF - Get Report) , Valeant Pharmaceuticals (VRX) , Fortress Investments (FIG) , AstraZeneca (AZN - Get Report) and American International Group (AIG - Get Report) .

Off the Tape

In his "Off the Tape" segment, Cramer sat down with Anil Chakravarthy, CEO of the once-public but now privately held Informatica, which helps companies use big data to transform and improve their businesses.

Chakravarthy said for customers like Nordstrom (JWN - Get Report) , Infomatica helps the retailer build profiles of customers and their buying habits so they can make intelligent recommendations. For other customers, like Conoco-Phillips (COP - Get Report) , Infomatica can provide the overall picture of an oil well, including how much was invested, how much the well is producing and whether it is likely to remain profitable at current oil prices.

Chakravarthy said that his company manages the types of data that is used to artificial intelligence systems.

When asked about being a private company, Chakravarthy noted that being private has allowed it to focus on growth and innovation, but the company plans to return to the public market eventually.

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 V and WWAV.