Tech is tanking but banks just got the green light to buy back $50B — rotate int
Thesis
While tech stocks have been plunging on AI volatility, large banks just cleared the Federal Reserve's stress tests with flying colors. This allowed giants like JPMorgan to announce a massive $50 billion stock buyback and Goldman Sachs to raise their dividend. At the same time, bets on interest rates staying elevated are pushing the U.S. dollar to 13-month highs. Higher rates are usually a headwind for tech stocks, but they directly boost bank profit margins on loans. This creates a compelling rotation trade: money is likely flowing out of volatile tech and into the financial sector, which is offering both safety and direct cash returns.
Strategy approach
Build a long strategy on JPM and GS using the D1 timeframe. Enter when the Nasdaq 100 (QQQ) closes down >1% (showing tech weakness) and JPM or GS makes a 10-day high. Exit if JPM or GS closes below its 20-day moving average, or hold for a maximum of 30 days.