Hey guys, we’ve got a big edition of “Buy It and Burn It” for you today off the back of the JPMorgan earnings report. This trade is part of my Money Links service, but I’m going to give it to you for free.
Let’s dive in.
JPMorgan Chase & Co. (NYSE: JPM) released its earnings results for the fourth quarter of 2020. It reported record profits — 20% more than the prior year…
And that was pre-COVID-19.
With numbers like that, you’d expect the stock to keep trending higher. This morning, however, JPMorgan was trading down, like almost all of the banking sector.
That’s why the JPMorgan earnings report led me to this trade. Full disclosure, JPMorgan is one of my favorite U.S. banks…
And it’s part of this trade idea, but not at the center of it.
The Big Picture for the JPMorgan Earnings Report
As we discussed recently, the stock market is showing signs of a pandemic-free world — and soon.
That isn’t going to happen, and I’ve been saying that since an effective vaccine was announced. But the stocks don’t care.
The stock market is already projecting interest rates moving back up, which I also don’t see happening… at least not at the rate the charts are showing.
The banking sector, in particular, is up 26.6% since the Democratic party took control of the White House and the Senate.
I know markets tend to overshoot, but that’s too big of a move for me.
Especially when it comes to banks, as there’s one factor that no one seems to be considering: Even during bull market runs, Democratic administrations are not typically kind to bank stocks in the short term. So it feels premature for the sector to be showing such gains…
That’s why I have this Money Link trade for you as we dive into the JPMorgan earnings report.
Please feel free to email me your trading questions at jeff@joyofthetrade.com and make sure to subscribe to my YouTube channel.
P.S. This volatility has some investors acting like gamblers with their retirement funds. Chasing lost money… panicking and buying… It’s sad.
Casinos can be fun, but leave the gambling mentality at the door when you’re trading.
If you can keep your head on your shoulders… and work a solid plan, history shows that these markets are exactly where you make your money.
So get in on this solid strategy.
