The S&P 500 Rally Is Sparks Bubble Fears. A Chart Analyst Sees Warning Signs

The S&P 500 has posted one of its strongest short-term rallies in decades, but a veteran market analyst says the move resembles patterns seen before some major market peaks, raising questions about whether the latest momentum can be sustained.

Jonathan Krinsky, chief market technician at BTIG, said the benchmark index climbed more than 5% over the four trading sessions ending Tuesday while simultaneously reaching a new 52-week high, an unusually rare combination that has occurred only three other times over the past 30 years, according to a research note cited by CNBC.

Those previous instances came in April 1999, March 2000 and November 2020. The March 21, 2000 occurrence was particularly notable because it came just one day before the peak of the dot-com bubble, Krinsky noted. The April 1999 signal was followed by several months of sideways trading that included a roughly 10% pullback, while the November 2020 rally preceded a sustained bull market. Krinsky said investors hoping for a repeat of the 2020 scenario may be disappointed.

"The bulls will hope it's November 9, 2020," Krinsky wrote in the note. "We have our doubts." The analyst also pointed to Microsoft as another potential warning sign.

The technology giant has surged nearly 27% over the past four trading sessions, marking one of the strongest short-term advances in its history. According to Krinsky, the only larger four-day rally occurred in 2000 after Microsoft had already suffered a sharp decline from its late-1999 peak.

Krinsky drew parallels between that episode and the company's recent price action. Microsoft reached a record high in July 2025 before falling roughly 37% over the following 11 months. The recent rebound, he argued, echoes the sharp relief rally seen during the dot-com era, though he stopped short of predicting history would repeat itself.

Instead, he suggested that investors who were caught in July's market selloff may use the recent rebound as an opportunity to reduce positions rather than add new exposure.

"The bigger issue we see is the market has been playing musical chairs as money has sloshed from momentum, to value, and now back to momentum," Krinsky said in the research note. "At some point the music stops, and participants might not be able to find a chair."

His comments come as investors continue to debate whether U.S. equities can extend their gains following a period of heightened volatility driven by concerns over valuations, trade policy, interest rates and corporate earnings.

Krinsky's caution also follows a separate warning from investor Michael Burry, who earlier this week suggested markets could be approaching a significant peak.

In a post published on his Substack newsletter Tuesday, Burry said he believes markets may be nearing "a major top" and warned of the possibility of a decline similar to the 1987 stock market crash. Unlike Burry, however, Krinsky did not predict an imminent collapse, instead emphasizing that recent momentum may prove unsustainable as investors rotate between different market sectors.

Technical analysts often monitor rare historical trading patterns for clues about investor sentiment, although such signals do not guarantee future market direction. Strong short-term rallies can occur both before major corrections and at the beginning of extended bull markets, making broader economic conditions and corporate fundamentals equally important factors for investors.

The S&P 500 has remained near record highs in recent sessions, supported by strength in large-cap technology stocks, but analysts remain divided over whether current valuations leave room for further gains.