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

AI As Consequential As Electricity

Please click here for an enlarged version of the chart of JPMorgan Chase & Co JPM.

Note the following:

• This article is about the big picture, not an individual stock. The chart of JPM stock is being used to illustrate the point.
• JP Morgan is the largest U.S. bank. Its CEO Jamie Dimon is the most influential banker in the world. Prudent investors pay attention to what Jamie Dimon says.  Prudent investors recognize that Dimon has access to more private data than almost anyone else.
• Jamie Dimon said, “We are completely convinced the consequences will be extraordinary and possibly as transformational as some of the major technological inventions of the past several hundred years: Think the printing press, the steam engine, electricity, computing and the Internet, among others.”
• The trendline on the chart shows the strong up move in JP Morgan stock since the last earnings.
• A quick look at the JPM chart shows that JPM is doing significantly better than popular stocks such as Apple Inc AAPL and Tesla Inc TSLA.
• JP Morgan will kick off the earnings season on Friday, April 12.
• As full disclosure, JPM is in the ZYX Buy Model Portfolio from The Arora Report and is long from $34.14.  
• A part of the rise in JPM stock is due to AI.  This illustrates the point that we have been sharing with you that the beneficiaries of AI are far beyond popular AI tech stocks such as NVIDIA Corp NVDA.  
• The Arora Report was one of the first to say that a fortune is to be made in AI all the way to 2030.  However, making a fortune from AI is not going to be a straight line. It will be treacherous at times. To emphasize the importance of making a fortune in AI, along the way, The Arora Report has continuously reinforced this message. The purpose of this article is to reinforce this message again with information from JP Morgan.
• The stronger your conviction about AI and the more knowledge you have, the more money you will extract from the markets. At the same time, two points are important.
  • There is too much AI hype. This over-hype can cause you losses.
  • There are also many gurus calling AI a fad. You will be doing yourself a disservice by believing such gurus. 
• Here are the key points from Jamie Dimon’s letter to shareholders:
  • The importance of AI simply cannot be overstated.
  • JPM has 300 use cases in production today.
  • AI has helped JPM significantly reduce risk in retail business by reducing fraud.
  • JPM has 2500 professionals working on AI and supportive tasks.
• The markets are taking a sigh of relief that over the weekend, Iran did not attack Israel.
• In The Arora Report analysis, prudent investors should not join the momo crowd in being oblivious to the potential of a wider Middle East conflict.  In The Arora Report analysis, the response from Iran is likely to be a surprise and at a time of Iran’s choosing and certainly not based on what stock market traders think.  

Magnificent Seven Money Flows

In the early trade, money flows are positive in NVDA, Amazon.com, Inc. AMZN, Meta Platforms Inc META, and TSLA.

In the early trade, money flows are neutral in Alphabet Inc Class C GOOG and Microsoft Corp MSFT.

In the early trade, money flows are negative in AAPL.

In the early trade, money flows are positive in SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust Series 1 QQQ.

Momo Crowd And Smart Money In Stocks

The momo crowd is buying stocks in the early trade. Smart money is inactive in the early trade.

Gold

The momo crowd is like a yoyo in gold in the early trade. Smart money is inactive in the early trade.

For longer-term, please see gold and silver ratings.

The most popular ETF for gold is SPDR Gold Trust GLD. The most popular ETF for silver is iShares Silver Trust SLV.

Oil

The momo crowd is selling oil in the early trade.  Smart money is inactive in the early trade.

For longer-term, please see oil ratings.

The most popular ETF for oil is United States Oil ETF USO.

Bitcoin

After the weekend hype, retail investors are aggressively buying Bitcoin BTC/USD ETFs. This time it is the retail buying and not bitcoin whales that is running up bitcoin. Bitcoin has moved above $72,000.

Protection Band And What To Do Now

It is important for investors to look ahead and not in the rearview mirror.

Consider continuing to hold good investments.

Strategic Investment Planning: Safeguarding Your Positions

Constructing Protection Bands

As an investor, it’s crucial to assess your risk tolerance and create a protection band that aligns with your individual preferences. This could involve holding cash, Treasury bills, or engaging in short-term tactical trades to safeguard your positions while still benefiting from potential market upswings.

Determining Protection Levels

Protection bands can be established by blending cash with hedges. The high end of the protection spectrum suits those inclined towards caution or in later stages of life. On the flip side, the lower end of the protection range caters to younger or more aggressive investors. If opting against hedging, ensure your cash reserves surpass but remain below the sum of cash and hedges.

Maximizing Opportunities with Cash

Remember, seizing new investment prospects necessitates holding ample cash reserves. When adjusting hedge levels, contemplate tweaking stop quantities for individual stock positions (excluding ETFs). Widening stops on remaining quantities and allowing greater leeway for high beta stocks, which tend to outpace market movements, can also be beneficial.

Crafting a Traditional 60/40 Portfolio

In the current environment, the risk-reward dynamics, adjusted for inflation, do not favor prolonged strategic bond allocations. Adherents of the classic 60% stock and 40% bond allocation approach may opt for high-quality bonds with durations of seven years or less. For those seeking a more nuanced strategy, utilizing bond ETFs as tactical rather than strategic positions is advisable.

Recognizing Expertise: The Arora Report

The Arora Report has earned a reputation for its prescient forecasts. Anticipating major market shifts, such as the AI rally, new bull market in 2023, 2022 bear market, post-virus market highs in 2020, and other significant events, underscores the expertise of The Arora Report. Stay informed with the Generate Wealth Newsletter by signing up here.

This piece is contributed content and does not reflect Benzinga’s editorial standards.