Michael Burry, famed for predicting the 2008 financial crisis, is maintaining his bearish stance despite the S&P 500 hitting record highs, warning that the market rally could still end in a steep sell-off.

"I continue to believe it is possible we are near a major top, and possible a 1987-type fall, but the S&P 500 making new highs likely will bring new money into the market," "The Big Short" investor said in a Tuesday Substack post.

Burry said rising markets and lower volatility encourage volatility-targeting and momentum funds to increase leverage, which can further fuel the market rally.

The investor said he remains confident in his long-term positions but would exit if the trades turned decisively against him. All remain profitable except his bet against Nvidia.

"Again, shorting is not for everyone," Burry wrote. "I must short. Most should not."

Notably, the 1987 stock market crash, known as Black Monday, occurred on Oct. 19, 1987, when the Dow Jones Industrial Average plunged 22.6% in a single day, marking the largest one-day percentage decline in its history. The sell-off spread across global markets and was fueled by a combination of program trading, investor panic, and market illiquidity.

Burry Doubles Down on AI Bear Bets

On Tuesday, the S&P 500 closed 1.8% higher, while the Nasdaq surged 2.6%, driven by strong earnings and falling oil prices amid hopes the Strait of Hormuz would reopen.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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