S&P 500's 5% four-day surge echoes 2000 dot-com top

The S&P 500's 5% four-day surge to a 52-week high has occurred only three times in 30 years, and two preceded sharp reversals, BTIG says.

"The sample is not statistically significant, but March 21, 2000 came one day before the dot-com bubble peak," Jonathan Krinsky, chief market technician at BTIG, said in a report.

The index climbed more than 5 percent over four trading sessions through Tuesday's close while reaching a 52-week high, a combination seen only on April 23, 1999, March 21, 2000 and Nov. 9, 2020. After the 1999 signal, the S&P traded sideways for seven months with a 10 percent drawdown; the 2020 case preceded a multi-month uptrend. Krinsky said he has doubts the current setup matches the 2020 precedent.

The warning comes as Microsoft surges nearly 27 percent in four sessions — its second-largest four-day move ever — and the Philadelphia Semiconductor Index jumps 16 percent, the biggest four-day gain since the pandemic. Krinsky expects the rally to fail near the 50-day moving average as investors hurt during July's unwind sell into strength.

Microsoft's trajectory offers a striking parallel. The stock hit a record on Dec. 30, 1999, lost 60 percent over 10 months, then staged a 29 percent four-day rally. In the current cycle, Microsoft reached an all-time high on July 31, 2025, fell 37 percent over 11 months, then surged 27 percent in four sessions — one of the two largest such rallies in the company's history.

Krinsky also flagged the SOX's 16 percent four-day surge from last week's lows, the largest since the pandemic. He maintains the rebound will likely extend to the 50-day moving average but face resistance there. High-beta momentum stocks rose 25 percent in four days and sit about 7 percent below the same level.

Sector rotation reveals 'musical chairs' beneath S&P advance

Krinsky characterized this quarter's S&P 500 advance as a "musical chairs" rotation of capital between momentum and value stocks rather than genuine bull-market broadening. From June 30 to July 28, the S&P was nearly flat while energy and financials gained more than 4 percent and technology and consumer discretionary fell 5 percent or more. After July 28, the rotation reversed sharply: technology rose 7.24 percent and consumer discretionary gained 8.69 percent, while real estate, consumer staples, utilities and healthcare all fell more than 2 percent.

Krinsky also pointed to an unusual VIX pattern. Normally the volatility index moves inversely to the S&P 500, but VIX has spiked even as the index rose — a divergence that historically has served as an early warning of building risk.

His view broadly aligns with Michael Burry, who said in a Tuesday Substack post that the market could be near a major top, possibly setting up a 1987-type fall. Krinsky stops short of calling an outright top but warns the rebound is likely to fail if investors hurt during July's unwind use the rally to sell. He noted that recovering from a 35 percent drawdown requires a 52 percent gain — a steep climb under current market structure.

Falling Treasury yields, lower oil prices and strong earnings expectations helped broaden the rally and lift the S&P 500 and Nasdaq back toward record levels, according to earlier reporting. SanDisk and Western Digital earnings due Wednesday after the close could trigger a gap higher Thursday morning, but Krinsky said that may simply create a selling opportunity within the resistance zone.

This article is for informational purposes only and does not constitute investment advice.