Another quarterly reporting period is about to begin in the US.
Next week, reports will be published by the financial sector.
On Tuesday, among others, their reports will present JPMorgan (JPM) and Goldman Sachs Group Inc (GS).
On Wednesday the word will be given to Bank of America Corp (BAC), Wells Fargo & Company (WFC), and Citigroup Inc (C)
There is a simple but quite effective strategy at the core of which is observing the “behavior” of the prices of the test group hoping to spot a pattern and apply this pattern to predict the behavior of the control (i.e. traded) group.
US banks are literally swollen with liquidity thanks to the generous monetary stimuli, and in general positive reports are being expected.
Let’s observe what numbers JPM and GS will reveal on Tuesday and see how their prices will react.
If good reports on Tuesday generate growth in quotes, then it’s more likely that the same reaction will follow on Wednesday after releases by BAC, WFC and C.
But it is worth bearing in mind that surprises are always possible, and reports might have an unpredictable impact on the prices. Who knows, maybe that good reports next week drag the prices down? :) All scenarios are possible.
The key here is to spot some pattern on Tuesday and use it to your advantage on Wednesday :)