In this morning’s AM Meeting I discussed a possible short setup in BRCM. I was very skeptical of the gap above $40 as this stock was trading at $30 a couple of months ago and only traded higher when they said they were hiring an investment bank to look at selling off some assets. In my view this was a good setup for “sell the news”. It is the opposite of recent trades in SWKS, CMG and BIIB that I have discussed that are “buy the news” situations.

As traders we need to evaluate each trade on its merits. If you simply short every gap for no rhyme or reason the market will eliminate you pretty quickly.

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