S&P 500 Rally Flashes Rare Signal Seen Only Three Times Before, Michael Burry Says

S&P 500 Hits Record High After Rare Four-Day Surge#

The S&P 500 reached a fresh record high this week after rallying 5% in just four trading sessions, a market pattern that has occurred only three times in history, according to research shared by investor Michael Burry.

The benchmark index climbed 1.79% on Tuesday to close at 7,736.52, its highest finish in two months, as strong corporate earnings and easing geopolitical tensions in the Middle East lifted investor sentiment.

However, the rally lost momentum on Wednesday. While the S&P 500 briefly touched another intraday record, it finished 0.17% lower at 7,723.55, ending its four-day winning streak. Meanwhile, the Dow Jones Industrial Average rose 263 points to a record 54,349, marking its fifth consecutive record close.

BTIG Data Draws Comparisons to the Dot-Com Era#

Burry highlighted research from Jonathan Krinsky, Chief Market Technician at BTIG, showing that a 5% rally over four trading days to a new all-time high has happened only three times before.

Those previous occurrences were April 23, 1999, March 21, 2000, and November 9, 2020. Two of those dates coincided with the peak and early decline of the dot-com bubble, prompting investors to question whether the current rally is becoming overheated.

In a post on Substack, Burry credited Krinsky's analysis, noting the rarity of the market pattern.

Analysts Remain Divided on Market Outlook#

Despite the historical comparison, not all strategists believe the rally signals trouble ahead.

Yardeni Research recently raised its year-end target for the S&P 500 to 8,250, arguing that resilient corporate earnings could continue supporting stocks. Likewise, Goldman Sachs President John Waldron said profit growth is expanding beyond technology companies, providing a stronger fundamental backdrop for the market.

Still, Waldron cautioned that market leadership has narrowed. Over the past several days, the cap-weighted S&P 500 has outperformed the equal-weighted index by roughly 4%, suggesting gains are once again being driven by a relatively small group of large-cap stocks.

With the S&P 500 testing record highs, investors will be watching closely to see whether history repeats itself or whether this rally can continue defying expectations.

Image credits: Equiti.com