One of the few short setups that has consistently worked in 2013 has been shorting stocks after extended moves that then gap higher after some sort of news catalyst. We saw this on Monday in $AMZN after the “drone story” on Sixty Minutes and again yesterday after $AAPL inked a deal with China Mobile that had been discussed ad infinitum the past few months. As an aside one of things that causes me to believe this market is a “Bull” and not a “Bubble” are the pull backs momentum stocks continue to have after large runups.

Steven Spencer is the co-founder of SMB Capital and SMB University and has traded professionally for 17 years. His email is [email protected].

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