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

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.

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.

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…

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