Tech is crashing but banks are buying back stock — rotate into JPMorgan and Gold
Thesis
The tech sell-off is driving a clear sector rotation. While the Nasdaq slides and chip stocks like Micron and Nvidia fall, the largest U.S. banks are fresh off passing the Fed's stress test with flying colors, allowing JPMorgan and Goldman Sachs to deploy massive capital returns. If the Trump administration continues to pressure the Fed to cut interest rates despite hot inflation, lower borrowing costs will act as a direct tailwind for bank profitability. Buying bank stocks here offers a way to benefit from both the health of the financial sector and a potential tech-to-financials market rotation.
Strategy approach
Build a rule-based strategy that enters long KRE and XLF on D1 when QQQ drops >1.5% on the same day that XLF closes up or flat, with a 21-day max hold and a 5% trailing stop.