A recent CNBC report suggested that Goldman Sachs' (NYSE: GS) was looking to sell its proprietary trading unit and the stock has responded with further gains after having bottomed in June.



Chart Courtesy of StockCharts.com

The market liked the news of the potential sale of the trading unit. For one thing, it's that trading unit that seems to have gotten Goldman into trouble over its recently settled issues with the SEC. The problem is that the trading unit makes a lot of money, which means that Goldman will have to rely on its other businesses, investment banking, money management and the administration of its vast holdings for its income.

It's hard to tell how much money will be leaving the door if and when the sale or spinoff of the unit takes place. But we suspect that a good deal of it will be doing so.

That leaves investors with the same set of questions that have dogged the company for the last few months. Is Goldman, now presumably without its big time trading unit, going to be the Goldman that Wall Street has looked upon to be a bellwether for the markets?

In this case, though, the company almost has to shed its trading unit. It is essentially a bank, after having taken TARP money, even though it paid it back. And since banks are being pressured to separate trading from banking, maybe Goldman is just getting ahead of the inevitable.

AT this point, though, Goldman shares are back above their 200-day moving average, just as the S & P 500 is poised to break out of its recent trading range. It's probably not a coincidence that the market is improving at the same time that shares of Goldman are starting to act much better.

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