Institutional Insights:Global Market Intelligence (GMI) | September Outlook
Global Market Intelligence (GMI) | September Outlook, Scott Rubner
Bottom Line: Farewell to August’s Positive Fund Flow Dynamics
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Despite maintaining a supportive near-term outlook on equities, the favorable positioning that bolstered the markets in August is expected to shift into a challenging dynamic after Labor Day. With systematic strategies nearing peak equity exposure, negative seasonal trends emerging, and volatility typically increasing, implementing downside equity hedges appears to be a timely strategy amid a crowded macro calendar.
Snapshot
Historically, September ranks as the weakest month for equities, characterized by rising volatility and diminishing retail engagement. As systematic strategies—such as CTAs, Vol-Control, and Risk Parity—approach their maximum allocations, coupled with a decline in corporate demand, the risk/reward balance tilts negatively, rendering hedges appealing. Nonetheless, the long-term trend remains intact and supportive of a potential Q4 rally.
On-the-Ground Sentiment (Citadel Securities)
Client activity remains robust at record equity market levels, even the Dow
Jones Industrial Average made a new high — a key benchmark for
household / 401k sentiment.
• Retail Equities: Retail net buyers in 16 of the last 18 weeks
• Retail Options: 16-week net buying streak, 17 of last 18 weeks
• Institutional Options: Bullish tone in 5 of the last 7 weeks
II. This Week’s Strategic Debate: Can record options activity persist?
• Equity option contract volumes tracking all-time highs.
• 0 days-to-expiry (0DTE) flow continues to expand.
• 71M option contracts traded on Friday (per OCC)
• 58M option contracts YTD 2025.
I believe this surge is structural, not cyclical — a reflection of consumer health and market engagement, not a passing fad.
Seasonality Watch: Q3 Asset Allocation Rebalancing
September Setup
September 3rd has historically marked the monthly high for SPX since
1928. Post-Labor Day FOMO tends to fade curtailing buy the dip flows.
•Quarter-end portfolio rebalancing intensifies in September.
•2025 has closely mirrored the historical composite pattern
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!