Tech and crypto are melting down but big banks just got a clean bill of health —
Thesis
We are seeing a massive flight to safety as investors dump volatile tech stocks and cryptocurrencies, wiping out over a trillion dollars in crypto value alone. At the exact same time, the Federal Reserve's annual checkup showed all major banks could easily survive a severe recession, prompting JPMorgan and Goldman Sachs to reward shareholders with massive stock buybacks and dividend hikes. Connecting these stories, the terrified money fleeing the tech and crypto crashes needs a safe place to land, and the newly fortified, highly profitable major banks are the perfect destination for that cash.
Strategy approach
Build a rule-based strategy that enters long XLF or JPM on D1 when QQQ drops >1% and Bitcoin (BTCUSD) makes a 20-day low on the same day, with a 21-day max hold and a 4% trailing stop.