Did You Enjoy That Face-Ripping Rally?

As ZaStocks pointed out on X, it was the second-biggest single day gain in Nasdaq history. The other two happened during bear markets. 

Today marked the second largest single day gain in NASDAQ history.

The top three spots?

1. 1/3/2001, +14.17%
2. 4/9/2025, +12%
3. 10/13/2008, +11.81%

In both other instances, the NASDAQ ended up making a new low.

— Za (@ZaStocks) April 9, 2025

The first one, on 1/3/2021, happened during the bear market that started in March of 2000, when the dot-com bubble popped. That bear market didn't bottom until October 9th, 2002. 

The third biggest one-day rally, on 10/13/2008, happened during the bear market that accompanied the Global Financial Crisis. That one didn't bottom out until March 9th, 2009. 

Any long-only investor who dived back in after those face-ripping rallies lost a lot of money over the next several months. 

What We Did Instead 

We took advantage of the rally to add short exposure, including on Apple (AAPL). 

https://t.co/boQlTVjpHh

— Portfolio Armor (@PortfolioArmor) April 9, 2025

Did it make sense for Apple shares to rally more than 15% on news of President Trump's 90-day pause on tariffs excluding China? 90% of Apple's products are still made in China. That rally seemed irrational to us, so we faded it. 

We also placed a couple of bullish bets made attractive by the liquidity drought due to the unwinding of the basis trade. 

https://t.co/X2FqTQOzMv

— Portfolio Armor (@PortfolioArmor) April 9, 2025

One of those was a call spread on iShares 20+ Year Treasury Bond ETF (TLT 0.80%↑), and the other was a calendar spread on Chevron (CVX 8.09%↑). 

Thursday Afternoon Update

Took some profits on yesterday's shorts today: 

1. Puts on Apple ( AAPL -6.28%↓). Bought for $1.50 on 4/9/2025; sold (half) for $4 on 4/10/2025. Profit: 167%.

2. Puts on Nvidia (NVDA -6.09%↓). Bought for $1.56 on 4/9/2025; sold (half) for $4 on 4/10/2025. Profit: 156%.

What To Do Now 

We keep telling you to take advantage of rallies to hedge. You should consider doing so. 

As a reminder, you can download the Portfolio Armor optimal hedging app by aiming your iPhone camera at the QR code below (or by tapping here, if you're reading this on your phone). Our app can help you find the least expensive hedges given your risk tolerance and time frame.

And if you want to follow us next time we zig when the market zags, feel free to subscribe to our trading Substack/occasional email list below. 

If you'd like to stay in touch

You can scan for optimal hedges for individual securities, find our current top ten names, and create hedged portfolios on our website. You can also follow Portfolio Armor on X here, or become a free subscriber to our trading Substack using the link below (we're using that for our occasional emails now).