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Market bears now scarcer than any time since 1987

Statues of a bear and a bull stand outside the Frankfurt Stock Exchange.
Hannelore Foerster | Bloomberg | Getty Images

Professional investors haven't had this little fear about stocks since Ronald Reagan was president.

It was the same year Michael Jackson told us in a song he was "Bad." The New York Giants won the Super Bowl.

And oh yeah ... by the way ... the stock market crashed.

As gauged by the weekly Investors Intelligence report, bearishness among market newsletter writers has fallen to 13.3 percent, a level it has not seen since 1987 as the market continues to set new highs despite a seemingly endless call for a long-overdue correction.

Billionaire and real estate magnate Sam Zell was the latest high-profile voice to warn about valuation, telling CNBC on Wednesday that "it's very likely something has to give" at a time when many companies are suffering from lack of demand even as the market surges to record levels.

September signals

Read MoreSam Zell: Stock market correction coming

Nonsense, say the bulls, who share skepticism that the market has been inflated through aggressive Federal Reserve monetary easing, yet see no signs that stocks are ready to tank.

"A great many investors and analysts are wasting their time trying to prove that stocks have formed a new bubble—which they claim must soon pop," David C. Jennett, who writes an eponymously named newsletter, said in remarks cited by Investors Intelligence in its report. "I think they are right about the bubble, but wrong about which market is in danger of a crash. It is much easier to make the case that the bond market is the real bubble these days."

Investors were concerned about valuation back in the 1987 as well, and for a day at least they were right.

In the infamous Black Monday on Oct. 19—forecast by Elaine Garzarelli and warned about by others—the Dow industrials plunged more than 22 percent in a day.

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The good news: The market recovered, and the year in total really wasn't that bad. The actually gained 5.2 percent when all was said and done and had only one negative year between then and the 2000 dot-com bubble pop.

Similarly, the scarcity of pessimism may not be as contrarian a bearish sign as it appears. (Sentiment survey analysis generally equates strong feelings in one direction to indicate that the market will swing the other way.)

Though the 42.8 percent spread between bears and bulls is considered "dangerous" under the baseline Investors Intelligence uses to gauge sentiment, it's been higher—45.4 percent in June—and the market has gone its merry way up regardless.

Despite warnings that September, historically the worst month for markets, is setting up for the correction, that argument has holes as well.

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Though it indeed ranks last of the 12 months, September has been negative just twice in the last 10 years, according to Dan Greenhaus, chief strategist at BTIG. Art Cashin at UBS pointed out that the September swoon largely traces back to more agrarian days in the U.S., when urban business people used their money to buy up wheat and other materials to last through the winter.

Piper Jaffray strategists have been relentlessly bullish, correctly foreseeing the S&P 500 cracking 2,000 this year, and believe 2,100 is a realistic full-year goal for the large-cap market index.

"At this juncture, both the intermediate and longer-term technical picture of the market remain bullish. Additionally, several of our short-term measures of market breadth have now 'reset' to neutral after the recent pullback," Piper's Craig W. Johnson and others said in the firm's weekly outlook. "We believe the stage is set for the broader market to make another leg higher."

—By CNBC's Jeff Cox