by Jason Bodner
September 3, 2025
A polar bear’s skin is black, but its fur is clear. The reason we perceive a polar bear as white is because its transparent hairs scatter and reflect visible light. What looks obvious on the surface is an illusion.
This is a useful reminder for investors: Things aren’t always what they seem.
Look at today’s headlines. Global unrest. Sticky inflation. Tense political standoffs. Geopolitical conflict.
Every news cycle seems to scream “fear.” The perception is that the world economy is teetering, that markets are fragile, that chaos is inevitable. And yet, when you pull back appearances and examine the underlying data, the truth is far less frightening. In fact, most signals suggest resilience, not collapse.
The Seasonal Trap Still Threatens Markets in September
History tells us that August and September are the bumpiest months for stocks. Only 40% of the time since 1990 has September ended in the green for equities. It’s the market’s most treacherous stretch of the year, often filled with volatility, sudden reversals and investor anxiety. This August began in familiar fashion, with a sharp early pullback, stirring fears that the seasonal curse was arriving on schedule.
Yet August didn’t unravel. Equities quickly steadied themselves and moved higher, defying expectations. While investors braced for the worst, the market did what it so often does – surprise us on the upside.
One big reason for that resilience lies in the data. The Big Money Index (BMI), a gauge of unusual institutional money flows, fell out of overbought territory on July 31, perfectly matching what 34-years of history would suggest. Overbought readings rarely last forever, and August often brings distribution.
But then something notable happened: The BMI bottomed at 65.7% and began rising again. Today it stands at 68%, meaning that over the last 25-trading sessions, nearly seven out of ten buy-sell signals were inflows. That’s not frothy euphoria, it’s steady participation in the long-term averages since 1990.
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