# JPMorgan and Goldman just smashed earnings records on a trading boom — ride the bank stock rally

_AI-generated trading idea · LONG · GS, JPM_

> Canonical page: https://commonquant.ai/research/for-you/jpmorgan-and-goldman-just-smashed-earnings-records-on-a-trad--833cae56-46b7-4339-b45c-6422ad5408de

Wall Street's biggest banks just smashed profit records thanks to a massive surge in stock trading. JPMorgan and Goldman Sachs are leading the pack, meaning investors are rotating money into financial firms.

## Idea

JPMorgan and Goldman Sachs just reported record-breaking quarterly profits driven by massive surges in stock trading revenue. When the biggest banks are printing record money from market activity, it signals a booming environment for financial firms. This creates strong positive momentum that usually pulls more investor interest into the sector. Buying the top banks right after they prove their business is firing on all cylinders is a classic way to ride that wave of investor enthusiasm.

## Advanced Analysis

### Verdict: wait for confirmation

\*\*Verdict: the earnings shock is real, but the trade isn't ready — wait for confirmation.\*\* The strongest case for this idea is that the thesis has numbers behind it: per Bloomberg's July 14, 2026 coverage, JPMorgan's stock-trading revenue rose 86% to a record profit and Goldman broke its own trading record, with JPM net income up 28.3% quarter over quarter to $21.2B and Goldman's up 17.7% to $6.6B. The strongest case against is that insiders at both banks were net open-market sellers for the period ended June 30, 2026 — roughly $29.3M at Goldman and $6.6M at JPMorgan — and the strategy's trailing 12-month realized record (0.07% on 50 trades, 32% win rate) is the weakest of its three windows, suggesting the edge has recently faded even as fundamentals boomed. Neither stock currently satisfies the full entry rule set: JPMorgan trades about 1.3% below its 20-day average at $353.51, Goldman's trend-strength reading of 14.3 is short of the 20 required, and the volume-accumulation leg is unreadable on both. The verdict flips to a buy if JPMorgan closes back above $358.11 with the volume leg confirming, or breaks the other way if the $350.18 (JPM) or $1,001.67 (GS) support levels give way.

\*\*Conviction breakdown\*\* — Thesis support: 75. Trade readiness: 35. Risk quality: 55. Backtest evidence: 60. Fundamentals trend: 70.

#### Conviction score breakdown

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

| Measure | Value |
| --- | ---: |
| Thesis support | 75/100 |
| Trade readiness | 35/100 |
| Risk quality | 55/100 |
| Backtest evidence | 60/100 |
| Fundamentals trend | 70/100 |
| Score | 59/100 |
| Composite Score | 59/100 |
| Evidence Tier | realized |

#### 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 | realized |

### Trade now: neither bank has triggered — here's the exact distance to entry

The setup is live as a watch, not a buy. Goldman closed at $1,036.53, just above its 20-day average of $1,033.81, but its trend-strength reading of 14.3 is still well short of the 20 the strategy requires, and the entry also needs a test of the first support level near $1,001.67 that closes back above it. JPMorgan closed at $353.51, about 1.3% below its 20-day average of $358.11 — a near miss — while its trend-strength reading of 35.4 already clears the threshold. Volume-accumulation confirmation is currently unreadable for both names, so treat that condition as unmet until it prints.

Once an entry triggers, the plan is mechanical: take profit at +5% from entry, hard stop at 2.4% below entry, and a maximum hold of 10 trading days. That is roughly a 2.1-to-1 reward-to-risk on each position. Sizing is capped at 25% per position with roughly 2.4% of the account risked per trade, so a full stop-out on both names costs a manageable slice of capital.

Waiting means something concrete today: do not chase either stock at current prices. The entries are designed to buy strength with confirmation (trend, volume accumulation, and a support-then-hold test), and only one of those legs is in place on each name. The paper track record on this exact rule set is active with two trades taken since mid-July and equity essentially flat so far, while the realized backtest over five years of daily bars produced a 23.7% return across 232 trades with a worst drawdown of 13.5% — supporting patience over forcing the trade early. The one honest caveat: exits were filled on daily trigger bars rather than intrabar data, so reported drawdown and win rates are coarse.

Concretely, for Goldman you need its trend-strength reading to push from 14.3 to above 20 and either a support-touch entry near $1,001.67 or the simpler three-condition entry to fire. For JPMorgan, one solid close back above roughly $358.11 with trend strength already at 35.4 puts the simpler entry one volume confirmation away. If price instead breaks below Goldman's $1,001.67 support or JPMorgan's $350.18 support, the setup degrades and the wait extends.

#### 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 |

### Record bank earnings plus a trend-following track record that actually traded

The thesis rests on a real, observable earnings shock. Per Bloomberg's July 14, 2026 coverage, JPMorgan posted a record profit with stock trading revenue up 86%, and Goldman broke its own stock-trading revenue record. That maps directly onto the fundamentals: JPM's net income jumped to $21.2B in the quarter ended June 30, 2026, up 28.3% from $16.5B the prior quarter, and quarterly return on equity climbed to 5.6% from 4.5%. Goldman's net income rose to $6.6B, up 17.7% quarter over quarter, with operating cash flow swinging from negative $31.9B to positive $6.1B. When the sector's two bellwethers print records on market activity, the 'booming environment for financials' argument has numbers behind it. The realized track record supports the momentum claim over a meaningful sample. On the daily timeframe over 60 months, the long JPM/GS ruleset traded 232 times and returned 23.7% with a 44.8% win rate, peaking at more than +28% on the equity curve before settling at +23.7%. Over 24 months it gained 21.1% across 110 trades — meaning nearly all of the five-year gain accrued in the most recent two years, which is consistent with the idea that the bank rally regime turned on recently. The equity curve's shape matches the thesis rather than contradicting it. The strategy spent 2021 through mid-2023 underwater (bottoming near negative 13.5%), then inflected sharply through late 2024 and 2025, compounding to roughly +29% by mid-2026 before a recent fade to about +22–24%. That is exactly the pattern you would expect if 'buy the banks after they prove their business is firing' only works during trading-boom regimes — like the one Bloomberg describes now. The payout side adds a mild carry cushion. Goldman raised its dividend roughly 38% year over year to $14 annualized with an $18 trailing twelve-month rate, and JPM's dividend is up 13.2% with a $6 trailing rate. Neither dividend is the reason to own these stocks here, but steady hikes funded by record profits are consistent with management confidence in the earnings…

#### 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:** 59
- **Thesis support:** 75
- **Trade readiness:** 35
- **Risk quality:** 55
- **Backtest evidence:** 60
- **Fundamentals trend:** 70

### Watch items

- **JPM — Price vs 20-day SMA**
- **GS — ADX (14)**
- **GS — On-balance volume**
- **JPM — On-balance volume**
- **GS — First support level**
- **JPM — First support level**
- **GS — Nearest resistance**

## Key details

- Symbols: GS, JPM
- Timeframes: D1, H1
- Tags: \#banks, \#earnings, \#momentum, \#wall\_street

## Community

- Upvotes: 30
- Views: 370
- Copies: 0
- Cosigns: 0

## News sources

- [Goldman Breaks Own Stock-Trading Revenue Record Again](https://www.bloomberg.com/news/videos/2026-07-14/goldman-breaks-own-stock-trading-revenue-record-again-video) — Bloomberg
- [JPMorgan Sees Record Profit as Stock-Trading Climbs 86%](https://www.bloomberg.com/news/videos/2026-07-14/jpmorgan-sees-record-profit-as-stock-trading-climbs-86-video) — Bloomberg

## Discussion (1)

**@sigma\_fox18** · 1 upvotes

Buying right after they prove the business is firing on all cylinders is exactly when you overpay. What does the forward PE look like factoring in this peak trading revenue?

## Related

- [GS trade ideas](https://commonquant.ai/stocks/gs)
- [JPM trade ideas](https://commonquant.ai/stocks/jpm)
- [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 (12-month and 5-year, walk-forward tuned) and stress-tested before they can go live, then monitored against the news hourly while they run.