AI, ARM IPO, And $3.4 Trillion Option Expiration Suck Fear Out Of The Stock Market – Be Cautious

Benzinga – To gain an edge, this is what you need to know today.

No Fear
Please click here for a chart of volatility index VIX .

Note the following:

• VIX is the fear gauge of Wall Street.
• The chart shows that VIX has fallen to the lowest level in two years.
• The fall in VIX is on the longest streak since 2017 – 118 consecutive days without back to back closes over 20.
• The VIX has closed under the 200 day moving average for 123 days in a row. This is the first time this is happening since 2009.
• $3.4 trillion notional value of options are expiring today. This is the largest September option expiration ever.
• The momo crowd aggressively started buying Arm Holdings American Depositary Shares (NASDAQ: ARM) shares after the regular session close yesterday and has continued to aggressively buy ARM shares in the IPO. Why is the momo crowd buying ARM so aggressively? The reason is that they believe that ARM is an AI play on par with NVIDIA Corp (NASDAQ: NVDA). Nothing could be farther from the truth. From yesterday’s Morning Capsule:

In The Arora Report analysis, ARM is not an AI company, but facts do not matter in the stock market when investors are excited. ARM is being marketed as an AI company, and the momo crowd does not know any better.

• ARM is attempting to pivot to become an AI company. It has yet to be seen if they can succeed.
• Thank you for all of your emails requesting a podcast on ARM. We are starting work on a podcast on ARM. The podcast will be available in Arora Ambassador Club.
• Wall Street is driven by fear and greed. Historically, it pays to sell when fear is sucked out of the stock market and to buy when greed is sucked out of the stock market.
• In The Arora Report analysis, the lack of fear is a reason to be cautious at this time.
• New data from China is spurring buying in stocks across the globe. The data indicates that China’s economy might be bottoming.
  • Industrial production came at 4.5% year-over-year vs. 4% consensus.
  • Retail sales came at 4.6% year-over-year vs. 3.0% consensus.
  • Unemployment rate came at 5.2% vs. 5.3% consensus.
• UAW is surgically striking against all of the big three automakers. This is unprecedented.
• As an actionable item, the sum total of the foregoing is in the protection band, which strikes the optimum balance between various crosscurrents. Please scroll down to see the protection band.

Magnificent Seven Money Flows
In the early trade, money flows are positive in Apple Inc (NASDAQ: AAPL), Tesla Inc (NASDAQ: TSLA), and Meta Platforms Inc (NASDAQ: META).

In the early trade, money flows are negative in Amazon.com, Inc. (NASDAQ: AMZN), Nvidia, Alphabet Inc Class C (NASDAQ: GOOG), and Microsoft Corp (NASDAQ: MSFT).

In the early trade, money flows are mixed in SPDR S&P 500 ETF Trust (ARCA:SPY) and Invesco QQQ Trust Series 1 (NASDAQ: QQQ).

Momo Crowd And Smart Money In Stocks
The momo crowd is buying stocks in the early trade. Smart money is