Wall Street trading desks are minting cash — momentum play on JPMorgan, Goldman, and Citi

Verdict

The idea's thesis is well-grounded: per Reuters and Bloomberg reporting from July 14, major banks posted record trading revenues, and that fundamental surge is confirmed in the data — Goldman Sachs grew diluted EPS roughly 154% year-over-year to $51.32, while JPMorgan earned $20.02 per share on $182.4B in revenue with an industry-leading ROE of 15.7%. But the backtested execution of this thesis is fragile: the strategy won only 33.3% of its 6 trades over the 60-month window, meaning the entire 130.3% return depends on a handful of large winners, and the final walk-forward holdout produced a negative return. No robust parameter setup was established, and Goldman Sachs — the closest name to triggering — still needs its 9-day EMA ($1,098.9) to cross back above its 21-day EMA ($1,075.3) before the entry arms. **Conviction breakdown:** Thesis support (72) reflects genuinely strong fundamental catalysts across all three names. Trade readiness (28) is low: no entry conditions are fully met, and JPMorgan's ADX of 12.5 is well below the 20 threshold needed for a trend signal. Risk quality (35) is constrained by a 13.9% maximum drawdown on a strategy designed for 10-day holds, combined with a win rate that makes losing streaks likely. Backtest evidence (30) reflects a small sample of 6 trades with a rejected walk-forward baseline that lost 0.57% on the untouched holdout. Fundamentals trend (75) is the strongest pillar, with JPMorgan and Goldman both posting top-quintile ROE and record trading revenues per the cited news sources.

Trade now

The strategy trades JPMorgan and Goldman Sachs based on a confluence of momentum and trend conditions. Currently, no entry rules are fully triggered. For JPMorgan, the 9-day EMA ($341.7) is above the 21-day EMA ($336.0), but the ADX (14) sits at 12.5 — well below the required threshold of 20 — so the stock lacks sufficient trend strength to arm the long signal. For Goldman Sachs, the picture is closer: ADX is 28.5 (above the 20 threshold) and RSI is 60.1 (comfortably below the 65 ceiling), but the 9-day EMA ($1,098.9) has not yet crossed back above the 21-day EMA ($1,075.3); it needs to close the 23.6-point gap to trigger the crossover. Neither name is actionable today. The compiled rules codify a risk envelope with a take-profit at 4.9% and a hard stop at -2.4%, yielding a roughly 2:1 reward-to-risk ratio. The backtest evidence on the JPMorgan pair over 60 months shows a 130.3% cumulative return across 6 trades, though with a 33.3% win rate — meaning the strategy relies on large winners offsetting frequent small losses. The worst peak-to-trough drawdown was 13.9%. Parameter sensitivity testing concluded with no recommended configuration change; no variant produced enough consistent walk-forward evidence to advance. The frozen baseline remains the active setup. "Wait" means exactly this: set price or indicator alerts on the EMA crossover for GS (around the $1,075 level on the 21-day EMA) and the ADX breakout for JPM (above 20), and do not take a position until the compiled rules flash green.

The bull case: record trading desks, solid backtest returns

The thesis rests on a concrete and well-documented fundamental catalyst. As reported by Reuters on July 14, JPMorgan posted record profit driven by big gains from dealmaking and stock trading, while Goldman Sachs separately topped estimates on a trading boom and corporate deal spree. The idea argues that when major banks post blowout earnings, their stocks enjoy a momentum pop as analysts upgrade forecasts. The fundamentals support this narrative: JPMorgan delivered full-year diluted EPS of $20.02 on $182.4 billion in revenue, while Goldman Sachs grew diluted EPS by roughly 154% year-over-year to $51.32. These are not marginal beats — they represent a genuine surge in profitability tied to market volatility that the thesis identifies as the core driver. The fundamental momentum is also broadening beyond the top line. Goldman Sachs' return on equity now sits at 13.7%, placing it in the 81st percentile of Financials sector peers, while JPMorgan's ROE of 15.7% ranks in the 85th percentile. This level of capital efficiency matters for a swing trade because it confirms that the trading and dealmaking boom is flowing through to shareholders, not being absorbed by rising costs or capital drains. For a strategy looking to ride a 10-day post-earnings pop, these ROE levels…

Scores

• Conviction score breakdown: 48
• Thesis support: 72
• Trade readiness: 28
• Risk quality: 35
• Backtest evidence: 30
• Fundamentals trend: 75

Watch items

• GS — EMA (9) vs EMA (21) crossover
• JPM — ADX (14)
• GS — RSI (14)
• JPM — RSI (14)
• JPM — Close vs nearest support
• GS — Close vs nearest support
• C — EMA (9) crossed above EMA (21)
• C — RSI (14) below 65
• C — ADX (14) above 20