Wall Street trading desks are minting cash — ride the bank earnings momentum

Verdict: Strong quarter, unconfirmed trigger — wait for the earnings-day pop

The strongest argument for this idea is that its economic engine is real and fresh: JPMorgan's June-quarter net income jumped 28.3% sequentially to $21.2B and Goldman's rose 17.7% to $6.6B, with Goldman's free cash flow swinging from -$32.4B to +$5.6B, per SEC filings. The strongest argument against it is the ownership posture — filings for the period ended June 30, 2026 show insiders net selling roughly $29.3M at GS and $6.6M at JPM, meaning the people closest to the story were monetizing the very rally the thesis wants to chase. The 60-month backtest returned 42.0% across 40 trades with a 37.5% win rate and an 8.5% maximum drawdown, which is a workable but fragile profile that lives off rare earnings pops. Meanwhile, the paper track has zero trades since the idea was published on July 15, and the parameter-sensitivity evaluation exceeded its time budget, so no robust nearby setup was established — the published 2.4% stop and 4.8% take-profit are the author's choices, not validated ones. The verdict is to wait: neither name meets its entry condition today (JPM's one-day momentum is -1.43% and GS's -0.20%, both below the +2% threshold). The single fact that would flip this to a buy is a 2%-plus up day on above-trend volume — most plausibly the next earnings report — ideally alongside a new insider filing that reverses the net selling.

Trade now: the trigger is a 2% up day, and neither bank is close

**Do nothing today.** The strategy goes long JPM and GS only when one-day momentum is above 2% with on-balance volume above its 20-day trend. Right now neither is in range: JPM's one-day momentum is -1.4% and GS's is -0.2%, so each sits roughly 3.4 and 2.2 percentage points below the +2% threshold. The volume check cannot be evaluated live because on-balance-volume data is unavailable in the current market feed, and the alternate crossover entry requires a close above the nearest resistance level — $360 for JPM (last close $353.51) and $1,064.46 for GS (last close $1,036.53). Waiting means doing exactly that: no position until a single session delivers a 2%-plus up day on above-trend volume or breaks that resistance on a close. The completed backtest supports the discipline of waiting rather than anticipating. Over five years on the daily timeframe the ruleset produced a 42.0% total return across 40 trades with a 37.5% win rate and an 8.5% maximum drawdown — a profile that depends on entering only the strong momentum days, not the near-misses. The paper track, live since mid-July, is flat at $10,000 with zero trades, which is the ruleset correctly standing aside. If an entry triggers, the risk geometry is fixed: the position stop sits at a 2.4% loss and the take-profit at a 4.8% gain, a 2:1 reward-to-risk, with each position capped at 25% of the book. Additional exits guard against a close below the nearest support ($350.18 for JPM, $1,001.67 for GS) and a 61.8% retracement level. Note that no robust alternative parameter setup was established — the sensitivity evaluation exceeded its time budget — so the published settings are what you trade. One caveat on execution quality: backtest exits were filled on daily trigger bars rather than intraday data, so treat the reported 37.5% win rate as coarse. The action plan itself is unchanged — the setup is waiting for its entry conditions, and today neither ticker meets them.

Blowout Earnings Fundamentals Back a Momentum Setup With a Real 60-Month Record

The idea's core thesis — that record trading profits at JPMorgan and Goldman Sachs translate into durable post-earnings momentum — is supported by the freshest numbers. Per the Reuters report on July 14, JPMorgan posted record profit on big dealmaking and stock-trading gains, and Yahoo Finance flagged Goldman's Q2 2026 beat on record equities trading the same day. The fundamentals confirm this is not spin: JPMorgan's net income jumped 28.3% sequentially to $21.2B for the quarter ended June 30, 2026, with quarterly return on equity rising to 5.6% from 4.5%, and revenue for fiscal 2025 grew 2.8% year over year to $182.4B. Goldman's net income rose 17.7% to $6.6B in the same quarter, with ROE climbing to 5.4% from 4.6%. Both banks are also shrinking their share counts, which amplifies per-share economics. Goldman cut shares outstanding 1.1% in a single quarter to 291.4M, extending a multi-year buyback streak, while JPMorgan reduced shares 0.8% to 2.66B. Rising earnings on a shrinking base is exactly the kind of fundamental backdrop that tends to attract the institutional rotation the idea describes. The shareholder-return machinery is intact and growing. Goldman has raised its dividend at a 38.5% annual clip, paying $18 per share over the trailing twelve months, and JPMorgan lifted its payout 13.2% annually to $6 trailing. Combined with JPMorgan's…

Scores

• Conviction score breakdown: 58
• Thesis support: 72
• Trade readiness: 35
• Risk quality: 55
• Backtest evidence: 58
• Fundamentals trend: 70

Watch items

• JPM — ROC (1)
• JPM — Close vs nearest resistance
• GS — ROC (1)
• GS — Close vs nearest resistance
• JPM — Close vs nearest support
• GS — Close vs nearest support
• GS — Insider net open-market activity
• JPM — Insider net open-market activity
• JPM — Next earnings report
• GS — Next earnings report