Wall Street trading boom drives record bank profits — ride the momentum on Goldman and JPMorgan

Verdict: Record bank profits, but the entry rule is years away from firing

The fundamentals behind this idea are genuinely strong: Goldman's $6.63B quarterly profit and JPMorgan's record $21.2B quarter for the period ended June 30, 2026, with JPM's return on equity up 1.1 points quarter over quarter to 5.6%, are exactly the earnings acceleration the thesis leans on. The strongest point against is mechanical — the entry requires a close above $1,139.50 on both names, roughly 10.7% above Goldman's ~$1,029 close and nearly 69% above JPM's ~$356, and the rule set produced zero entries across 1,234 evaluated daily bars over five years. A second, quieter counter-signal: ownership filings for the quarter ended June 30, 2026 show net open-market insider selling of about $29.3M at GS and $6.6M at JPM, posted after the filing deadline rather than as a current signal. No robust parameter setup was established — the sensitivity evaluation exceeded its time budget — so the published thresholds are the levels, and this remains a watch-list idea. Wait until the entry conditions actually confirm; the fundamentals can stay strong while the setup stays dormant.

Trade now

This is a watch-list setup, not a live signal: the rules were evaluated on real daily bars but have not yet opened an entry. The binding blocker is a fixed price threshold of $1,139.50 on the close. GS last closed at about $1,029 — roughly 10.7% below the trigger — so no entry is possible on Goldman today at any combination of the other conditions. The same constant also applies to JPM, which closed at about $356, nearly 69% below it, effectively ruling out a JPM entry outright. The momentum conditions are far closer on Goldman: RSI (14) is 49.5 against a threshold of above 50 (about half a point away), the 10-day EMA at about $1,029 sits just under the 50-day EMA at about $1,033 waiting for a cross, and the 20-day channel condition is already met. The trend-strength condition is the second real gap — ADX (14) is 11.4 versus a threshold of above 25. On JPM, RSI is already above 50 at 50.5 and the EMA gap is about $6.95, but ADX at 9.1 is even further from its threshold. If an entry fires, the live risk plan is mechanical: a stop at a 2.4% loss on the position, a take-profit at a 4.8% gain (about 2:1 reward to risk), a structural stop below the nearest support level (about $1,002 on GS, about $350 on JPM), and a thesis time stop that exits after 45 days in the trade. Position size is capped at 25% per name with roughly 2.4% of equity risked per position. What "wait" means concretely: do nothing today. Watch for GS to close above $1,139.50 while RSI holds above 50, ADX climbs above 25, and the 10-day EMA crosses above the 50-day EMA — all on the same daily close. No robust parameter setup was established for loosening these thresholds, so the published levels are the levels. If price grinds sideways with ADX below 25, the setup simply stays dormant; that is the strategy working as designed, not a reason to force a trade.

Record bank profits and analyst upgrades give the momentum thesis real fuel

The idea's core claim — that the trading boom is flowing straight into bank profits — checks out in the latest filings. Goldman reported $6.63B of net income in the quarter ended June 30, 2026, up from $4.62B in the year-ago quarter and its best quarterly result in the supplied series, with quarterly return on equity reaching 5.4% versus 3.8% a year earlier. JPMorgan posted a record $21.2B quarterly profit for the same period, up from $15.0B in Q2 2025, with quarterly ROE improving from 3.6% to 5.6% quarter over quarter — a 1.1 percentage-point gain. That is exactly the fundamental acceleration the thesis leans on, and per the Bloomberg report JPMorgan's equity-trading revenue climbed 86% on the way to that record. The full-year 2025 numbers frame why analysts are raising targets, as CNBC did for Goldman on July 14, 2026 after what they called a blowout quarter. Goldman earned $17.2B for fiscal 2025 with diluted EPS of $51.32, up 26.6% year over year, and JPMorgan earned $57B with diluted EPS of $20.02 on $182.4B of revenue, growing 2.8% year over year. Both banks sit in the top fifth of the Financials sector on ROE — Goldman at the 82.8th percentile (13.7%) and JPMorgan at the 86.5th percentile (15.7%) out of 889 peers. Capital return compounds the earnings story. JPMorgan has been shrinking its share count every quarter — 2.66B shares at June 30, 2026 versus 2.80B a year earlier — and just lifted its quarterly dividend from $1.25 in early 2025 to $1.50 by July 2026. Goldman's dividend trajectory is even steeper: annual payouts went from $6.50 per share in 2021 to $14 in 2025 and 2026, roughly a 38% compound annual rate, with the latest $5 quarterly payment ex-dated September 1, 2026. Companies only do that from positions of earnings confidence. On the setup itself, this is a watch-list arrangement: the rules were evaluated on real daily bars but did not open an entry — zero triggers across 1,234 evaluated daily bars over the past 60 months (and likewise zero in 24- and 12-month windows). The author's bounded search rationale explains why: a fixed price-level condition near $1,139.5 is…

Scores

• Conviction score breakdown: 45
• Thesis support: 70
• Trade readiness: 20
• Risk quality: 45
• Trigger proximity: 15
• Fundamentals trend: 75

Watch items

• GS — Close vs entry threshold
• GS — RSI (14)
• GS — ADX (14)
• GS — EMA (10) vs EMA (50) cross
• GS — Nearest support
• GS — Insider net open-market activity
• JPM — Close vs entry threshold
• JPM — ADX (14)
• JPM — Return on equity
• JPM — Insider net open-market activity
• JPM — Nearest support