# Wall Street trading boom delivers record profits for JPMorgan and Goldman — momentum play on bank stocks

_AI-generated trading idea · LONG · GS, JPM_

> Canonical page: https://commonquant.ai/research/for-you/wall-street-trading-boom-delivers-record-profits-for-jpmorga--dd4092ed-72dd-436d-a398-6f96cf5fa2ec

The biggest banks on Wall Street just smashed their earnings targets thanks to a massive surge in trading and dealmaking. JPMorgan posted record profits, and analysts are so thrilled with Goldman Sachs' blowout quarter that they immediately raised their price targets for the stock.

## Idea

Major Wall Street banks are blowing past earnings expectations primarily because trading revenues and corporate dealmaking have surged back to life. JPMorgan's record-breaking profits confirm that the overall banking sector is in incredibly strong shape, which sets a powerful bullish backdrop for the industry. Meanwhile, Goldman Sachs not only posted a massive earnings beat but is being rewarded with immediate analyst price target hikes, showing that Wall Street expects the momentum to continue. Riding this wave of positive momentum makes financial stocks highly attractive right now.

## Advanced Analysis

### Verdict: The trading boom is real, but the entry isn't — wait for the confirmation levels

The fundamentals behind this idea are the strongest part of the case. JPMorgan's June-quarter net income hit $21.2B, up 28.3% sequentially, and Goldman swung from a $32.4B free-cash outflow to a $5.6B inflow while net income rose 17.7% to $6.6B — exactly the trading-and-dealmaking rebound the thesis bets on, per the Reuters and July 14 CNBC reports. The sharpest counterpoint is insider behavior: ownership filings covering the June 30, 2026 period (delayed disclosures, not current signals) show net open-market selling at both banks — about $29.3M at GS across 14 holders and $6.6M at JPM across 25 holders. On profitability quality, Goldman's full-year ROE of 13.7% sits at only the 45th percentile of 889 Financials peers versus JPM's 15.7% at the 86.5th. Tactically, nothing has triggered: GS is above its EMA at $1,031.74 with RSI at 53.0, awaiting a dip-and-recross of 45, while JPM at $354.81 sits about $2.02 below its EMA at $356.83 with RSI at 42.7, still 2.3 points shy of the trigger. As a scope note stated once, the 4-hour rule set could not be backtested because intraday history fell short of the required warmup on both symbols, so no parameter variants were searched and the decision rests on live levels and filings. The risk frame is decent — a 2.3% stop against a 4.6% take-profit, roughly 2:1 — but GS has drawn down 31% at its worst point in two years, so the sector can move well beyond any stop. Verdict: a genuinely strong earnings story with an unconfirmed entry — watch, don't chase.

#### Conviction score breakdown

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

| Measure | Value |
| --- | ---: |
| Thesis support | 78/100 |
| Trade readiness | 35/100 |
| Risk quality | 55/100 |
| Fundamentals trend | 74/100 |
| Score | 61/100 |
| Composite Score | 61/100 |
| Evidence Tier | not\_backtestable |

#### 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 | not\_backtestable |

### Trade now: wait for the momentum cross to complete

\*\*Nothing to trigger yet — here is exactly what we are waiting on.\*\* The strategy wants a long on GS and JPM on the 4-hour chart once price sits above the 50-period EMA, the RSI (14) crosses above 45, and the ADX (14) holds above 20. On GS, price is $1,034.76 versus an EMA of $1,031.74 (met, $3.02 above it) and ADX is a strong 39.8, but the RSI already sits at 53.0 — above 45 — so it needs to dip and \*cross back up\* through 45 before the entry condition fires. On JPM, price is $354.81 versus an EMA of $356.83 (about $2.02 below, marked near) and the RSI is 42.7, roughly 2.3 points under the 45 trigger. ADX at 82.0 is more than satisfied. In short: GS is one pullback-and-recross away; JPM needs both a reclaim of its EMA and an RSI push through 45.

\*\*Risk frame once triggered.\*\* Position risk is capped at 2.3% with a hard take profit at 4.6% above entry — roughly 2:1 reward-to-risk — a maximum hold of 120 bars (about 20 days on the 4-hour chart), and additional signal-based exits at Fibonacci and support/resistance levels. Sizing is capped at 25% of the book per position. The thesis behind the setup is intact per the idea's own argument: JPMorgan's record profits (net income of $21.2B in the June quarter, up 28% sequentially per SEC filings) and GS's beat-driven analyst target hikes give the bullish backdrop, and the daily series shows GS up strongly over the past year with a 1.2 Sharpe ratio.

\*\*One scope note, stated once:\*\* this rule set could not be backtested over the requested windows because 4-hour history for both symbols fell short of the required warmup length. No parameter variants were searched and no historical performance figures can be quoted for the rules themselves — the decision rests on the live levels above, not claimed backtest results.

\*\*What "wait" means concretely:\*\* do not chase. For GS, watch for RSI to dip toward 45 and cross back up while price holds the EMA near $1,032 and the $1,030 support. For JPM, watch for a close above the EMA at $356.83 plus an RSI cross above 45. If either leg loses its support level instead — GS below $1,030, JPM below $353.56 — the setup cools and we reassess rather than average in.

#### GS price and trigger map

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

| Measure | Value |
| --- | ---: |
| Ticker | GS |
| Timeframe | 4h |

#### JPM price and trigger map

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

| Measure | Value |
| --- | ---: |
| Ticker | JPM |
| Timeframe | 4h |

### The trading-and-dealmaking engine is firing on all cylinders

The core of the thesis — that a trading and dealmaking rebound is driving outsized bank earnings — is well supported by the most recent filings. JPMorgan's quarterly net income hit $21.2 billion for the period ended June 30, 2026, up 28.3% from the prior quarter's $16.5 billion, and its fiscal 2025 full-year net income of $57.0 billion came on revenue of $182.4 billion, up 2.8% year over year with a 31.2% net margin. That is the record profit Reuters flagged on July 14, 2026, driven by gains in stock trading and dealmaking — exactly the revenue engine the idea bets on. Goldman Sachs shows the same pattern with more torque. Its June-quarter net income of $6.63 billion was up 17.7% sequentially, quarterly return on equity improved to 5.4% from 4.6%, and free cash flow swung from negative $32.4 billion in the March quarter to positive $5.6 billion — a 117% swing. Operating cash flow flipped the same way, from negative $31.9 billion to positive $6.1 billion. The CNBC piece from July 14, 2026 describes analysts raising price targets immediately after what it calls a blowout quarter with an upbeat outlook, which is the momentum confirmation the thesis needs. Capital return reinforces the bull case rather than complicating it. Goldman lifted its annual dividend 38.5% to $14 per share for 2026, with the quarterly payout already stepped up from $4.00 in late 2025 to $5.00 by the September…

#### 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:** 61
- **Thesis support:** 78
- **Trade readiness:** 35
- **Risk quality:** 55
- **Fundamentals trend:** 74

### Watch items

- **GS — RSI (14) cross above 45**
- **GS — Price vs 50-period EMA**
- **GS — Nearest support level**
- **JPM — Price vs 50-period EMA**
- **JPM — RSI (14) cross above 45**
- **JPM — Nearest support level**
- **JPM — Next quarterly XBRL snapshot (Sep 30 period end)**
- **GS — Next ownership filing cycle**
- **JPM — Next ownership filing cycle**
- **GS — Next ex-dividend date**

## Key details

- Symbols: GS, JPM
- Timeframes: H4
- Tags: \#banks, \#earnings, \#momentum, \#Wall Street

## Community

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- Views: 2
- Copies: 0
- Cosigns: 0

## News sources

- [We're raising our price target on Goldman Sachs after a blowout quarter, upbeat outlook](https://www.cnbc.com/2026/07/14/were-raising-our-price-target-on-goldman-sachs-after-a-blowout-quarter.html) — CNBC
- [JPMorgan posts record profit on big gains from dealmaking, stock trading - Reuters](https://news.google.com/rss/articles/CBMinwFBVV95cUxPUXZXdWw0Um15aXgwRy1uU3dobEJIREY5cDItRFd0d2ZvQjRDdXdVdHZJNmtWWmNuVG5hVWlNZmlXaVQ0eWJ2WndSM1JMOGtIQmpWM29XeVR0OVVheFZQNGVfNmhlYldNdjlfLU1MazZLMjJGVmc4TzdvSWRKNnVkRjNJemVxNGtrck5EWVA5c1dWdUdBSW92Y0RBWDRrdms?oc=5) — Reuters

## 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.