Michael Burry, the investor who made a fortune betting against subprime mortgages, is warning that the stock market's longest stretch of calm in three decades is a red flag. The calm has held even as a small group of AI-linked mega-caps drives most of the market's gains. Wednesday marked the 182nd straight session without a day where at least 80% of NYSE volume came from falling stocks, the longest streak in at least 30 years.
Why Burry Sees Danger
Burry warns that leverage is the real danger for investors waiting out market cycles. He advises avoiding leverage to avoid folly. He has flagged concerns about Nvidia, Micron Technology, Caterpillar, Palantir Technologies, and Tesla. He holds bearish positions against Nvidia and Micron.
The AI Concentration Problem
Passive index funds carry heavy weightings in AI names, amplifying market swings. Burry compares today's setup to the 1987 crash and dot-com peak, where narrow leadership eventually gave way to broader selling.
A Fund That Already Felt the Pain
Situational Awareness, an AI-focused hedge fund run by Leopold Aschenbrenner, sold its public stock portfolio to Citadel last month due to steep losses on chip and data center stocks, including SK Hynix.
What the Streak Really Means
BTIG technical strategist Jonathan Krinsky tracks the signal of days with at least 80% falling volume. Every year in the past three decades has recorded at least five such sessions; a full 2026 without one would be a first. Nvidia has traded quite flat year-to-date despite being a huge market player.
The next session will test whether the streak holds. A day with falling stocks dominating 80% of NYSE volume would end the run and give Burry's warning some teeth.
