Michael Burry, the Big Short investor, has again caused a social media furor with a one-word tweet: Sell. The tweet, which at the time of writing has already garnered 2.1 million views, comes a few hours ahead of the Federal Reserve monetary policy announcement.
Burry, who was betting on the housing market in the run-up to the financial crisis, has been bearish on the market, which he indicated last week using a chart appearing to be that of the S&P 500 index during 2002.
Burry's chart highlighted the region between mid-Sept. 2001 and mid-March 2002 when the S&P 500 rose 18% after the stock market crash in the wake of the 9-11 attacks. This was the period, as Burry highlighted in his chart, where the daily moving average of 50 DMA crossed over the 100 DMA, indicating a bullish trend.
The market fell by a whopping 30% between March 2002 and Sept. 2002, highlighting the fallacies of false breakouts that many investors follow and often fall into traps.
Price Action: The S&P 500 has gained 6% in the last 2023. The SPDR S&P 500 ETF Trust SPY has gained 6.74% while the QQQ Trust Series 1 QQQ has gained 11.4% during the period. Only time will tell whether the Fed decides to slow down its rate hike pace, whether markets cheer the central bank's language and whether a soft landing would actually be the case. It is all speculation until then, as experts say.