Wall Street banks crushing earnings on trading boom — ride the momentum in JPMor
Thesis
JPMorgan and Goldman Sachs just reported record-breaking revenue from stock trading, showing that market volatility is driving massive profits for Wall Street banks. Wells Fargo added to the positive momentum by beating profit estimates thanks to both strong trading and interest income. With the unofficial start of earnings season kicking off on such a strong note, these banks are showing that higher interest rates and active markets are a winning combination for their bottom line.
Strategy approach
Build a swing trading strategy that enters long JPM, GS, and WFC on the daily timeframe when they gap up post-earnings with volume > 150% of their 20-day average. Enter on the open following the earnings release. Exit conditions: close the position if the stock loses the earnings day's open price, or hold for a fixed 10 trading days. Allocate equal risk across all three tickers.