Michael Burry is removing several company-specific positions while extending his largest disclosed bearish technology bets into 2027, shifting his latest warning from individual valuations toward the possibility that systematic trading strategies are amplifying an increasingly leveraged market rally.
The investor said he continues to believe the market may be near “a major top” and faces the possibility of a decline resembling 1987, in an X post published after the S&P 500 reached a record closing high Tuesday.
Burry also acknowledged that the breakout could attract additional money before any reversal, making his warning less an immediate crash call than a claim that the market’s final advance could create the conditions for a sharper decline.
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Burry extends the clock amid record rally
Burry exited his long position and call options in Microsoft, closed his short position and put options in Oracle, and closed January Palantir Technologies puts, according to MarketWatch. He reportedly remains short Palantir shares.
At the same time, Burry rolled his Nvidia put options to June 2027 and extended his bearish position against the Invesco QQQ Trust to February 2027.
The changes also make the portfolio difficult to characterize as uniformly bearish. Closing Oracle shorts removes one downside position, while exiting Microsoft calls removes bullish exposure.
The warning followed one of the market’s strongest sessions of 2026. The S&P 500 gained 136.02 points, or 1.8%, to close at a record 7,736.52 on August 4. The Dow Jones Industrial Average rose 1.7% to 54,085.88, also a record, while the Nasdaq Composite jumped 2.6% to 26,584.99, according to the AP News.
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The S&P 500 was up 13% for the year following Tuesday’s close.
Palantir shares surged 29% after the company reported stronger-than-expected earnings, producing the stock’s largest one-day gain since February 2024. AI-linked earnings from Palantir and Caterpillar, combined with lower oil prices and easing Treasury yields, helped broaden the rally.
Burry’s concern is that the strength itself can increase risk. He argued that rising prices and declining volatility encourage volatility-targeting funds to increase leverage, while momentum strategies add exposure to securities that are already advancing.
“Remember, the market going up on falling volatility forces vol-targeting funds to leverage up, and brings leverage from other momentum strategies into play,” he wrote.
The Cboe Volatility Index rose 4% to 16.5 on Tuesday but remained 21% below its level five sessions earlier, MarketWatch reported. Burry also cited research from BTIG strategist Jonathan Krinsky showing that the S&P 500 had gained approximately 5% over four sessions before reaching its new high, a pattern that had occurred only three other times over the previous 30 years.
Burry’s current position extends an argument he has developed throughout 2026. In a May 28 Substack post, he said he had rolled his semiconductor and QQQ puts while increasing the capital at risk, describing the market as a possible “blowoff top.”
In a July 23 post, he focused on crowded momentum trades used by multi-strategy hedge funds, particularly strategies that buy recent winners while shorting stocks with weak momentum.
The 1987 reference raises the scale of the risk Burry is describing. On October 19, 1987, the Dow dropped 22.6% in one session, its largest one-day percentage decline, according to Federal Reserve History.
