Market Report: The Most Powerful Statement You'll See All Year

We all know about the tremendous punishment the Wall Street has handed to any company exposed to the subprime market.

It all started with companies like Countrywide Financial (CFC: NYSE) and Washington Mutual (WM: NYSE), which initiated these loans.

And then the weakness flowed into companies like Citigroup (C: NYSE) and Bank of America Corporation (BAC: NYSE), who jumped onto the bandwagon and began handing out these loans to keep up with their peers.

And then the troubles extended onto brokerage firms like Bear Stearns (BSC: NYSE), Merrill Lynch (MER: NYSE) and Morgan Stanley (MS: NYSE), all of which began acquiring these loans in bundled packages.

And when all the dust settled, nearly every major bank and brokerage house had some level of subprime exposure on their hands, which sparked a massive sell-off that witnessed every stock named above setting a fresh 52-week low over the last three months. And that’s why I considered yesterday’s news so remarkable.

In case you missed it, here’s what happened…

In one of the most powerful statements you’ll see all year, Goldman Sachs Group (GS: NYSE) announced that they WILL NOT be taking any significant charges or write-off losses due to the subprime mess. In fact, Goldman Sachs said that they “maintain a short position” in the subprime mortgage market, which could ultimately allow the powerhouse brokerage firm to completely avoid the subprime problems that clobbered virtually every other major banking and brokerage firm.

To my eye, this single announcement solidifies Goldman’s position as the top brokerage play that your investment dollars can buy. And in terms of a forward-looking price forecast, this sets the table for another upside run to the previous high at the $250 level.

While every other financial play on Wall Street is flirting with new 52-week lows, GS is approaching a new 52-week high. In fact, by the end of the year, GS could very well be a $285 stock. Therefore, this week’s trading tactic is quite simple.

Based on this week’s news, I’d be a December or January call buyer of GS on any price dips.

Bryan