Visualize What Michael Burry Means With His Cryptic Messages About The Stock Market
So many people love to quote Dr. Burry’s twitter messages on YouTube, but a video talking about so many things makes it difficult to really understanding what he means.
It is actually very easy to understand his call with some drawings on the S&P weekly chart.
The boxes put in the chart is for the purpose of understanding the weird dynamics caused by Fed’s printing.
The red rectangle back in 2018 highlight the effect from Fed’s reaction to the VIX explosion which led to a strong correction later that year.
Then a bigger bubble is formed in 2019 at 2.5x the magnitude of the 2018 one and burst so badly Fed step in again.
Again, here we are at 2.5x the magnitude of the 2019 bubble with the burst of the bubble in progress.
Dr. Burry thinks S&P will go down below that 2020 low, highlighted by the green box.