Justin Banks
Growth & Momentum Trader, Founder of Wolves of Wealth
US financials could lead the market into year-end if the Fed signals at the upcoming FOMC that rates will stay higher for longer, as expected. The financial sector is breaking out on the weekly chart, and banks such as JPMorgan, Goldman Sachs, Morgan Stanley and Bank of America are quietly reclaiming trend and pushing toward new highs. x.comÂ
JPMorgan is buyable on pullbacks to its daily 9-period moving average ahead of an earnings run-up in early July, with financials such as Goldman Sachs, Citigroup, Interactive Brokers and Bank of America doing great. x.comÂ
Bank stocks look buyable if systematic selling is reacting to a flatter yield curve: the front end that drives earnings has barely moved. JPMorgan and Citi card spending rose 10% and 13%, and Citi and Wells Fargo reported lower credit losses. Wells expects steady margins and improving interest income as loans grow and old fixed-rate assets roll into higher yields. Funds crowded into banks before results, limiting near-term buyers. x.comÂ
JPMorgan's miss on both revenue and earnings strengthens the case for avoiding bank and financial stocks. The earlier bank-index chart rollover had suggested possible profit disappointment, but the observed JPMorgan share weakness is not a near-term price forecast. x.com x.com x.comÂ
Banks' weak response to earnings despite low expectations warrants caution into the rest of Q3 reporting. JPMorgan, Wells Fargo, Citigroup and Goldman Sachs all fell after mixed results, while the bank ETF also declined. x.comÂ
Financials could be bottoming as major institutional accumulation meets extreme relative weakness. The Financial Select Sector SPDR Fund has been compressed near $50 for 17 months, saw its second record-level volume accumulation last month, and its six-month candle is sweeping lows while defending the largest institutional support on record. It is reclaiming its all-time-high anchored VWAP after a bullish engulfing candle, with no sell pressure. A drop back below $50.70 would be unwelcome. x.com … Show more
Bank earnings season may mark peak earnings for financials, opening a path for the Financial Select Sector SPDR Fund to retest its 4Q21 peak near $40. Cycle indicators turned in 4Q25, when the 3-month Treasury yield broke its monthly 50-period moving average, so the market should start treating current earnings as a peak. The fund peaked in January 2026 and has dropped below its monthly 20-period average, opening a retest of the 50-period average. Whether it plays out remains to be seen. x.comÂ
JPMorgan's $500 SpaceX target looks a bit absurd because banks that profited from its IPO are pretty biased. The bank raised its December 2027 target from $240, though the bullish case is understandable. x.comÂ
Banks and XLF look to have bottomed this past week, supporting a local bottom in US small caps. Stockspy1 noted that the Russell 2000 includes many regional banks, linking the banking-sector turn to IWM. x.comÂ
JPMorgan should ultimately go lower, but the near term looks less favorable for a bearish bet. Q1 metals-trading earnings are likely to be very profitable, and proposed rules easing large-bank capital requirements show regulators trying to protect big banks like JPMorgan. European financials are a safer place for the bearish view for now. x.comÂ
JPMorgan stock has tended to bottom and return to all-time highs whenever CEO Jamie Dimon says he wouldn't buy stocks, and per @PolymarketMoney he just said it again. x.comÂ
