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Minyanville's Take on the Tape: Morgan Stanley, Bank of America, RIM


Sniffing through the earnings dew.

The new phone books are here in the form of Q4 earnings, and the early action is chock full of giggles.

Mother Morgan (MS), my former stomping ground, reported a smaller-than-expected loss on better-than-expected equity trading revenue (always the most volatile component in the earnings mix). Insofar as Morgan was the only firm (of the five major banks) to post a positive P&L for 2011-and perhaps more importantly, the perception of an imminent European implosion has abated-the stock is higher as we fire up the jets.

Bank of America (BAC) notched a quarterly profit, although it achieved its results through a different route-the company sold assets and cut expenses. Still, given the widespread panic in the name-concerns over mortgage exposure and the near-death experience at the $5 level (which would have prohibited some funds from holding the name)-the news has buyers licking their lips in the early going. We opined a few months ago that the reverse head-and-shoulders formation "worked" to $9 but I got shaken out of the name (it happens). Still, remember that banks look ahead, not back, when they report earnings.

Research in Motion (RIMM), a stock that I'm involved with, exhibited impressive price action yesterday following the outright denial of interest by Samsung. While perception remains that other potential suitors exist, I peeled out of most of my exposure on Tuesday following the 40% run in the stock (too much fast money piled into the name, in my view). $16 is trendline support, but that may prove penny-wise and pound foolish. I continue to watch the name, and will look to buy dips should they occur.

Finally, while the market has "room" to S&P 1360, as discussed in December 2011, the reaction to news is always more important than the news itself. Please keep that in mind during the first 30 minutes of trading as there's always a ton of noise in and around the opening, and a truer tenor tends to emerge at 10:00 a.m EST.

Random Thoughts:
  • If you would like a FREE WEEK of our real-time (and real snazzy) Buzz & Banter where some of the best traders and money managers I now share their ideas and analysis, please click here and pass this along to those you know. No credit card or anything -- just free access for a week. We're a community, and at the end of the day, we rely on you to help us do the voodoo that we do. Thanks so very much, and have a great day!
  • Has Europe figured it out? I don't know, but it seems they've taken some steps in the right direction. The question I wrestle with is: What if they have? What if austerity and higher taxation is the 'solution' (neither of which is pro-growth)? Does that matter? Or will it only matter in time, and we've got a window between here and there? (If I knew the way, I would take you home).
  • Can a 68% writedown (on Greek debt) actually be deemed "voluntary"? And how will the counter-party risk reverberate up and down the financial food chain?
  • Am I the only person in America who is short Tim Tebow?
  • Do you remember when the smartest guys in the room were screaming, "Get Out of the Market!" and we postured the "other side" of that trade? Given the tape hasn't looked back since (S&P +8%), where are we in the psychological continuum: denial, migration or panic?
  • My bride-to-be suggested last night that I've outgrown the nickname "Toddo" and I should adhere strictly to my given name, Todd. While I've been practicing my "Yes, Dear" (with a smile and nod), I've never been one to conform. As such, from here on in, I'll be known in the 'Ville as The Trader Formerly Known as Toddo.


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

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.

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