# Everything is crashing but the banks are buying themselves — defensive rotation into JPMorgan and Goldman

_AI-generated trading idea · LONG · GS, JPM, XLF_

> Canonical page: https://commonquant.ai/research/for-you/everything-is-crashing-but-the-banks-are-buying-themselves-d--66d800ef-1c1b-48ea-8340-635a0accff1f

Tech stocks and cryptocurrencies are both crashing, and the situation just got worse with military strikes in the Middle East. With panic everywhere, large bank stocks look like a safe place to hide — they just passed government stress tests and are returning billions to shareholders.

## Idea

The combination of a raging tech selloff, a crash in cryptocurrencies, and a military strike on Iran creates a perfect storm of market panic. When fear spikes this aggressively, investors flee to safety. JPMorgan and Goldman Sachs just passed the Federal Reserve's stress tests and announced massive $50 billion buybacks and dividend hikes, making them ideal defensive plays. Unlike speculative tech or crypto, these banks have government-tested balance sheets and are actively shrinking their share count to support the stock price.

## Advanced Analysis

### Verdict: panic-buying the banks is a real edge — but today is not the panic

The idea is a contrarian risk-off rotation: buy JPMorgan and Goldman when QQQ drops more than 1.5% and Bitcoin more than 3% on the same day. The strongest point for it is that a completed 60-month daily backtest on the JPM leg returned 76.6% across 26 trades with a 20.6% worst drawdown — and it worked in both the 2022–2023 stress and calmer regimes. The strongest point against is that the edge has been flattening: the last 12 months produced just 0.9% on 6 trades with a 33% win rate, and the June 30 filings show net insider selling of roughly $29.3M at Goldman and $6.6M at JPMorgan, undercutting the 'insiders buying themselves' framing. Fundamentals do back the defensive claim — JPM's Q2 2026 net income of $21.2B was up 28.3% sequentially with an 86.5th-percentile return on equity, and Goldman's quarterly net income of $6.6B rose 17.7% while its dividend has grown from $6.50 in 2021 to $14 annually. But nothing triggers today: JPM's one-day move of -1.4% is only about 0.07 percentage points from the entry line while GS sits at -0.2%, and the fixed 2.3% stop versus 4.6% take-profit demands roughly a 70% win rate the recent history does not deliver. Wait with alerts set — and watch the early-October ownership filings to see if insider selling accelerated.

#### Conviction score breakdown

Composite score computed by the server from the applicable evidence-tier dimensions.

| Measure | Value |
| --- | ---: |
| Thesis support | 60/100 |
| Trade readiness | 35/100 |
| Risk quality | 45/100 |
| Backtest evidence | 55/100 |
| Fundamentals trend | 70/100 |
| Score | 53/100 |
| Composite Score | 53/100 |
| Evidence Tier | backtested |

#### Decision scenarios

Bull, base, and bear cases synthesized from the cited evidence tier. Likelihoods are rounded evidence-weighted judgments, not statistically calibrated forecasts.

| Measure | Value |
| --- | ---: |
| Evidence Tier | backtested |

### Trade now: banks on watch — the panic day hasn't printed yet

\*\*Nothing triggers today — and that's the correct read.\*\* The strategy buys JPM and GS after a genuine risk-off day: QQQ down more than 1.5% and BTC down more than 3% on the same session. Right now JPM's one-day change is -1.4%, only about 0.07 percentage points from the -1.5% entry line, and its Williams %R reads -76.2 versus the -80 trigger — the two are unusually close. But GS is nowhere near: its one-day change is -0.2% versus a -1.5% requirement, and its Williams %R sits at -40.6 versus -80. 'Wait' means holding cash with alerts set on those levels, not pre-positioning.

\*\*Risk math is fixed by the rules, not by opinion.\*\* Each position risks roughly 2.3% of equity to a stop, with a take profit at 4.6% — a 2:1 reward-to-risk per trade — capped at 20% of the portfolio per name. The completed 60-month backtest on JPM supports the wait: a 76.6% total return across 26 trades with a 50% win rate and a worst drawdown of 20.6%, meaning the edge came from sitting out most days and buying the panic ones. Note the exit fills in that backtest were approximated on daily bars, so treat the drawdown figure as coarse.

\*\*Fundamentals back the defensive thesis while you wait.\*\* Goldman's most recent quarter showed net income of $6.6B, up 17.7% quarter-over-quarter, with free cash flow swinging to +$5.6B from -$32.4B the prior quarter, per SEC filings. JPM booked $21.2B in quarterly net income, up 28.3%. The idea's core claim — stress-tested balance sheets with shrinking share counts (JPM shares down 0.8% in the last quarter, GS down 1.1%) — checks out against the filed data. Insiders, however, are net sellers in both names per the June 30 ownership filings (about -$29.3M at GS, -$6.6M at JPM), a wrinkle worth watching at the next filing deadline.

#### GS price and trigger map

Uses the idea timeframe and keeps price levels on the price axis.

| Measure | Value |
| --- | ---: |
| Ticker | GS |
| Timeframe | 1d |

#### JPM price and trigger map

Uses the idea timeframe and keeps price levels on the price axis.

| Measure | Value |
| --- | ---: |
| Ticker | JPM |
| Timeframe | 1d |

#### XLF price and trigger map

Uses the idea timeframe and keeps price levels on the price axis.

| Measure | Value |
| --- | ---: |
| Ticker | XLF |
| Timeframe | 1d |

### Panic-day bank entries with tested guardrails

The idea's core logic — buy JPMorgan and Goldman when tech and crypto are being dumped — is a contrarian risk-off rotation, and the completed backtest gives it real support. Over a 60-month daily window with 1,235 bars evaluated, the JPM leg returned 76.6% across 26 trades, with a 50% win rate and a worst peak-to-trough drawdown of 20.6%. The shorter 24-month window also traded profitably (+16.3% on 10 trades), meaning the pattern did not depend on a single market regime — it worked in both the high-rate stress of 2022–2023 and the calmer tape since. The thesis also rests on fundamentals that genuinely look defensive relative to peers. JPM's full-year 2025 revenue of $182.4B grew 2.8% year over year, net income reached $57.0B with a 31.2% net margin, and its 15.7% return on equity sits at the 86.5th percentile among 889 financial-sector peers. Quarterly momentum is accelerating: Q2 2026 net income of $21.2B was up 28.3% from the prior quarter, and return on equity rose to 5.6% for the quarter. Goldman's most recent quarter showed net income of $6.6B (up 17.7% sequentially), return on equity improving to 5.4%, and a share count that keeps shrinking — down 1.1% in the quarter. The capital-return story in the idea is visible in the corporate actions data. Goldman has raised its annual dividend from $6.50 per share in 2021 to $14 in 2025 and 2026 — a 38.5% annual growth rate — and just paid $5.00 per share with a September 1, 2026 ex-date, putting trailing twelve-month payouts at $18. JPM's dividend path is steadier but still growing, from $3.70 in 2021 to a $4.50…

#### GS Debt to equity

Debt to equity trend from CommonQuant fundamentals/XBRL data; -12.8% from first to latest point.

| Measure | Value |
| --- | ---: |
| 2009-12-31 | \2.775801114347937 ratio |
| 2010-06-30 | \2.5871388125008465 ratio |
| 2010-09-30 | \2.6047821087275467 ratio |
| 2010-12-31 | \2.433515176586173 ratio |
| 2011-03-31 | \2.525949026480288 ratio |
| 2011-06-30 | \2.532215711205705 ratio |
| 2011-09-30 | \2.639824220979341 ratio |
| 2011-12-31 | \2.582077040026144 ratio |
| 2012-03-31 | \2.503670313721112 ratio |
| 2012-06-30 | \2.420396678333677 ratio |
| Latest Value | \2.420396678333677 ratio |
| Change Pct | \-12.803670773716377 ratio |
| Ticker | GS |
| Timeframe | reported periods |

#### GS sector percentile check

Ranks GS against 877 companies in its sector using CommonQuant fundamentals.

| Measure | Value |
| --- | ---: |
| Free cash flow | \0.6841505131128849th percentile |
| Return on equity | \45.219347581552306th percentile |
| Ticker | GS |
| Sector | Financials |
| Peer Count | 877 |

#### JPM sector percentile check

Ranks JPM against 889 companies in its sector using CommonQuant fundamentals.

| Measure | Value |
| --- | ---: |
| Return on equity | \86.50168728908886th percentile |
| Revenue growth (YoY) | \32.362459546925564th percentile |
| Ticker | JPM |
| Sector | Financials |
| Peer Count | 889 |

### Scores

- **Conviction score breakdown:** 53
- **Thesis support:** 60
- **Trade readiness:** 35
- **Risk quality:** 45
- **Backtest evidence:** 55
- **Fundamentals trend:** 70

### Watch items

- **JPM — JPM one-day price change (ROC 1)**
- **JPM — JPM Williams %R (14)**
- **GS — GS one-day price change (ROC 1)**
- **GS — GS Williams %R (14)**
- **JPM — JPM price vs nearest support**
- **GS — GS price vs nearest support**
- **GS — GS and JPM insider net open-market activity (next quarterly filing)**
- **JPM — JPM next dividend ex-date payment per share**

## Key details

- Symbols: GS, JPM, XLF
- Timeframes: D1
- Tags: \#financials, \#risk\_off, \#geopolitics

## Community

- Upvotes: 9
- Views: 0
- Copies: 0
- Cosigns: 0

## News sources

- [U.S. strikes Iran after Trump accuses Tehran of ceasefire violation in Strait of Hormuz](https://www.cnbc.com/2026/06/26/us-strikes-iran-strait-of-hormuz-ceasefire.html) — CNBC
- [Stock Futures Slump as Tech Selloff Rages On After Mag 7 Dumped](https://www.barrons.com/livecoverage/stock-market-news-today-062626/card/nasdaq-futures-slump-as-tech-selloff-rages-on-after-mag-7-dumped-eUxRamb9q6VCpPm8n3b7?siteid=yhoof2&yptr=yahoo) — Barrons
- [Crypto Selloff Deepens as Bitcoin Hits Multi-Year Low](https://finance.yahoo.com/markets/crypto/articles/crypto-market-today-june-25-221641426.html) — Yahoo Finance

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## Related

- [GS trade ideas](https://commonquant.ai/markets/gs)
- [JPM trade ideas](https://commonquant.ai/markets/jpm)
- [XLF trade ideas](https://commonquant.ai/markets/xlf)
- [Latest market news](https://commonquant.ai/news)

## About CommonQuant Research

Ideas and Advanced Analysis are generated with fresh, LLM-selected news headlines and grounded in SEC XBRL fundamentals and peer percentiles. Strategies built from these ideas are automatically backtested (over a timeframe-dependent historical window with walk-forward tuning) and stress-tested before they can go live, then monitored against the news hourly while they run.