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Why the Wednesday morning tech rally scares Mark Cuban

Mark Cuban
Melody Hahm | CNBC
Mark Cuban

Stock markets opened to another unpredictable day of trading Wednesday, with Netflix, Google and Amazon leading a rally in shares of major technology stocks. But while some saw the rebound as an opportunity, celebrity investor Mark Cuban said the uptick "made no sense."

"I would really like to buy the market here," Cuban wrote via Cyber Dust, an ephemeral mobile messaging app similar to Snapchat. "But what scares me is that the stocks that are up pre-market are the momentum stocks. It makes no sense because the momentum players should have gotten crushed on the way down."

Netflix, Google and Amazon shares were all up 4.25 percent or better at the market open, with the S&P 500 technology sector up 3 percent as a whole, after getting battered in a global market selloff over the past few days. That should be a good thing for Cuban, who owns "a ton" of Facebook and Netflix—but the dot-com era billionaire and "Shark Tank" star said he's not so sure what's really behind the rally.

Cuban said Wednesday he "honestly doesn't know" who is buying the stocks or how they are buying them, saying it may relate to computer-algorithm or "algo traders" or exchange-traded funds (ETFs).

"They don't seem to be trading on fundamentals, but rather as part of an equation I'm trying to figure out," he wrote to his followers, called "dusters," on the app he funds and advises. Wednesday marked the third consecutive day that Cuban has publicly questioned popular digital trading techniques like ETFs and high-frequency trading in the wake of market volatility.

Others have more favorable views of "FANG," an acronym for Facebook, Amazon, Netflix and Google coined by CNBC's Jim Cramer.

Read MoreCuban takes another jab at high-frequency trading

Analysts at Evercore upgraded shares of Amazon to "buy" in a note Wednesday morning, writing that given traction with Amazon Prime memberships and a large market share of the cloud computing industry, the e-commerce giant was more than 20 percent below the target price. Goldman Sachs also upgraded Google to "buy," noting expanding margins, cost control measures and new transparency efforts as the technology company restructures under the Alphabet umbrella.

Despite his comments, Cuban said he made a trade Wednesday morning: He bought both call and put options set to expire in January 2017. He also said that for liquidity reasons, he thinks it might be safer to "play" currency or oil than stocks.

"I think the market will be higher in January 2017 and I want to take a position here," Cuban wrote in a second Cyber Dust post Wednesday.

Read MoreCuban: China fell prey to top mistake an investor can make

—CNBC's Gina Francolla contributed to this report