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Random Thoughts: Navigating Earnings and Europe

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See all sides as we piece together this puzzle.

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The holiday-shortened week is upon us and the bulls are feeling emboldened after investors shrugged their shoulders at last week's sovereign debt downgrades. They know, as do we, that the reaction to news is always more important than the news itself.

Of course, Europe is but one of our current focuses, albeit the one that matters most. Earnings are also front and center and while financials are notorious for looking ahead (on earnings) rather than dwelling on what was, we would be wise to watch Citigroup (C) and Wells Fargo (WFC)- which I thankfully covered in real-time on Thursday as a function of discipline-as well as JPMorgan (JPM). As go the piggies, so goes the smoke.

I continue to trade around my Research in Motion (RIMM) position from the long side despite the 34% rally off the December 2011 lows (and no, I didn't catch the bottom). While I remain of the view that it works higher, I've decided to only play the stock (I punted the odd lot March 20 calls) as I don't like owning fat-tailed options (and these puppies are pumped). I continue to hold the stock, buying dips and selling blips.

What else? Glad you asked. In no particular order:
  • The action in commodity land is worth a mention; in a correlated world, higher commodities-and yes, that includes oil-is asset class positive (including stocks).
  • We noted last week that overbought conditions can be worked off as a function of time or price. It would seem, at least at first glance today, that the former storm is in play.
  • Is Turnaround Tuesday actually Wednesday if the markets are closed on Monday?
  • Tom Petty. Cinco De Mayo. Austin, Texas. Booked!
R.P.

Twitter: @todd_harrison

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Position in RIMM

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at todd@minyanville.com.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

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