How many records is this by now? Equity records, I mean. I’ve lost count.

September can be treacherous for stocks, and I suppose it still might be, but the S&P just managed a third consecutive weekly gain. So, the world’s risk asset benchmark par excellence has advanced every week this month, defying a nefarious seasonal.

Friday’s gains marked the 24th record since the S&P reclaimed all-time highs late in June. It’s not literally every day, but it sure feels like it.

As I put it last week, I hope you bought the “Liberation Day” dip. Because my goodness, that was 33% ago.

It’s worth noting that although professional money managers are the most bullish since February according to a popular survey, they aren’t head over heels. They aren’t all-in. The same survey showed the equity Overweight’s just barely above the long-term average and thereby nowhere near levels seen in and around historical extremes.

At the same time, retail sentiment isn’t euphoric either. In fact, it’s bearish on net, according to the most widely-cited weekly poll.

The simple figure above plots the AAII bull-bear balance along with the S&P. This week was the seventh in a row where the bears outnumbered the bulls, despite a succession of new records for the index over the same period, and notwithstanding a very large week-to-week upsurge in optimism.

If you’re wondering when the last time the AAII balance was that consistently bearish in the face of record-high stock prices, the answer’s almost never. As a short Friday blog post on the terminal pointed out, there are just two comparable episodes looking back 25 years: Early summer 2019 and the summer of 2020, during the pandemic distortions.

The implication is that neither pros nor retail are caught up in any sort of bullish delirium. Remember: The positioning extremes (i.e., nosebleed %ile equity exposure levels) are on the systematic side, not necessarily on the discretionary side.

Of course, the AAII metric’s just an anecdotal indicator. Some data tells a different, or at least a more nuanced, story. For example, Citadel’s numbers suggest retail’s been a structural buyer of equities for 19 of the last 22 weeks, and for 20 straight months.

I suppose that doesn’t preclude bearish sentiment. You can be bearish and buy stocks anyway. Hell, that’s the story of my investing life. But it’d be a mistake, I think, to extrapolate from anecdotal metrics to argue that retail flows are working against the rally. They pretty clearly aren’t.

Speaking of Citadel, Scott Rubner summed up the state of play. The bull case says “AI-driven CapEx, liquidity tailwinds, a resilient consumer and a supportive Fed” are all keeping a bid under risk and keeping a “soft landing in play.” The bear case says “stretched valuations, late-cycle credit fragility, stagflation risks and priced-in rate-cut optimism” together constitute an ominous backdrop.

So… what? Who’s right? What’s the takeaway? If you ask Rubner, it’s as simple as “stay[ing] constructive on structural demand” while being mindful to “hedge near-term risks.” After all, he said, “September–October remains a vulnerable window.”