Big banks just got a $50B buyback green light while tech collapses — rotate into
Thesis
JPMorgan and Goldman Sachs just secured approval for billions in buybacks and dividends after passing the Fed's stress test with flying colors, showing their balance sheets are rock-solid. Yet the broader market is plunging, with the Nasdaq on pace for its worst week in a year and the S&P 500 teetering on a technical breakdown. When investors indiscriminately dump everything during a tech-driven panic, high-quality bank stocks with massive share buyback programs act as a safe harbor. The financials are being punished for crimes they didn't commit, making this a textbook rotation play from expensive, volatile tech into cheap, cash-rich banks.
Strategy approach
Build a rule-based strategy that enters long JPM and GS on D1 when QQQ drops more than 1.5% in a single session while JPM and GS remain above their 50-day moving averages. Exit when either JPM or GS makes a 10-day high, or apply a 7% hard stop loss. Maximum hold time of 30 days.