Tech crash plus bank mega-buybacks — rotate from chips into JPMorgan and Goldman
Thesis
The combination of a falling Nasdaq and a surging US dollar typically punishes growth companies, but it is a massive tailwind for large banks. When interest rates expectations rise, banks earn more on their loans. This is reinforced by the news that all 32 major banks survived the Fed's stress test, leading JPMorgan to announce a massive $50 billion stock buyback and Goldman to hike its dividend. Connecting the dollar's 13-month high to the banks' stress test success gives us a clear thesis: money is likely rotating from rate-sensitive tech into financials.
Strategy approach
Build a rotation strategy that enters long JPM and GS on D1 when QQQ closes down >1.5% and JPM or GS closes up on the same day. Condition: enter only if the DXY is within 2% of its 52-week high to confirm the strong-dollar/high-rate regime. Hold for 21 days with a 6% trailing stop.