Next Wave Of Disruptive Technology

Please click here for an enlarged chart of Advanced Micro Devices, Inc. (NASDAQ:AMD).

Note the following:

• This article is about the big picture, not an individual stock.  The chart of AMD is being used to illustrate the point.
• The chart shows AMD stock has fallen below zone 1 (resistance).
• The chart shows AMD stock is no longer on the steep upward sloping trendline.
• RSI on the chart shows AMD is oversold.  Oversold stocks tend to bounce.
• AMD is teaming up with IBM Common Stock (IBM) to advance quantum computing.  AMD is a leader in AI accelerators and high performance computing.  IBM is a leader in developing quantum computers. Working together, AMD and IBM could produce fault tolerant quantum computers with real time error correction.  The collaboration could result in open source, scalable platforms which would reshape the future of computing.
  • In our analysis, over the next few years most revenues will be derived from hybrid computing that combines traditional computing with quantum computing.  Combining AMD's high performing CPUs, GPUs, and FPGAs with IBM's quantum computers will give both companies an edge.
• NVIDIA Corp (NASDAQ:NVDA) Jetson AGX Thor developer kit leverages Nvidia's Blackwell GPUs for next generation physical AI.  Nvidia announced general availability of this technology, which can be used in robots for manufacturing, healthcare, retail, agriculture, and transportation.
  • We previously shared with you that Nvidia has a path to become an $8T company – the path is not through AI like ChatGPT but through robotics.  
• Infineon Technologies AG (OTC:IFNNY), a major German semiconductor company, is collaborating with Nvidia to advance humanoid robots that can not only move but can act, sense, and connect securely and safely.

Magnificent Seven Money Flows

Investors can gain an edge by knowing money flows in SPY and QQQ.  Investors can get a bigger edge by knowing when smart money is buying stocks, gold, and oil.  The most popular ETF for gold is SPDR Gold Trust (GLD).  The most popular ETF for silver is iShares Silver Trust (SLV).  The most popular ETF for oil is United States Oil ETF (USO).

Bitcoin

As a reader of our report you already knew that Bitcoin (CRYPTO: BTC) whales were taking advantage of retail investor euphoria to sell bitcoin.  Whales have continued to sell bitcoin, which has spilled into whales selling other cryptos to retail investors.  

What To Do Now

Consider continuing to hold good, very long term, existing positions. Based on individual risk preference, consider a protection band consisting of cash or Treasury bills or short-term tactical trades as well as short to medium term hedges and short term hedges. This is a good way to protect yourself and participate in the upside at the same time.

You can determine your protection bands by adding cash to hedges.  The high band of the protection is appropriate for those who are older or conservative. The low band of the protection is appropriate for those who are younger or aggressive.  If you do not hedge, the total cash level should be more than stated above but significantly less than cash plus hedges.

A protection band of 0% would be very bullish and would indicate full investment with 0% in cash.  A protection band of 100% would be very bearish and would indicate a need for aggressive protection with cash and hedges or aggressive short selling.

It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.  When adjusting hedge levels, consider adjusting partial stop quantities for stock positions (non ETF); consider using wider stops on remaining quantities and also allowing more room for high beta stocks.  High beta stocks are the ones that move more than the market.

Traditional 60/40 Portfolio

Probability based risk reward adjusted for inflation does not favor long duration strategic bond allocation at this time.

Those who want to stick to traditional 60% allocation to stocks and 40% to bonds may consider focusing on only high quality bonds and bonds of five year duration or less.  Those willing to bring sophistication to their investing may consider using bond ETFs as tactical positions and not strategic positions at this time.

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.