CFA Level 1: PASS

Got my level 1 CFA results yesterday morning, I assumed the worst in that I thought I did pretty well but likely still fell just short but I passed! Probably one of the greatest feelings and best accomplishments I have had to date. It feels great to be done with that hurdle and move on to Level 2. I was actually surprised at how well I did I got above 70% on 7 out of 10 sections of the test and almost for sure got above 70% overall. I think this may be the first time that the minimum passing score was at least 70% or maybe a 69% after looking at some scores that were a band 10 fail(top 10% of failures). Even with the MPS much higher than 2008(likely closer to 65%) there was a fairly large jump in the passing rate from 35% to 46%. Either way, I passed and know that I know the material(and hopefully potential employers do too now) and get to study for level 2 now! :-)

In terms of the market I have recovered some over the past two days. Things have played out pretty much as expected so I have taken that opportunity to recoup some losses. ISRG had a pull back and I decided to cut it loose after I gained back half my loss. This was a great move at the time as it made a new high again yesterday but we will see what happens going forward. I was noticing on the monday down day that the financials were diverging and staying up when the market was down so I sold my SKF position fairly quickly thinking that if the market strengthened financials could take off. I took the opportunity to lighten my SPY puts as well. On Tuesday I closed more of my put position on the SPY and now have just a normal position size on. Each day it has still been that I have higher gains earlier in the day and the market rebounds into the close so essentially being disciplined and selling into weakness has been the difference of making back money and not.

I am now short the S&P 500 via Sept puts in case we do test 955 as we technically should before resuming the rally. To hedge this I still have my December Corn futures contract which continues to annoy me. It is sitting around this 33o level after breaking its downtrend it will likely consolidate here before moving up.

I am now just waiting and looking to get into some more positions when they are at lower risk entries. Futures are down slightly right now, Asia sold off decently with Shanghai pulling back 5%. S&P futures hit a low of 964 but have since rebounded. This could be seen as a bullish divergence however I partially feel like it is a head fake and we end up selling off. Materials will likely be under pressure all day but they have run a lot in such a short period of time it would be crazy not to expect some pullback.

I find it humorous, and it likely goes unnoticed, but since my interview where I was talking markets and I was asked what stocks I personally liked I said I liked materials and metals(for inflation and real demand eventually) and specifically FCX and ACH. Since that day which was June 13th FCX has moved 25% and ACH has moved 38%. I obviously wish I had been in on those moves, I was waiting a little too long to see if we broke down. I feel partially vindicated, even though that is short term outperformance I expect it to continue for years.

We could see a struggle today as a sell-off may be the logical choice but we have buying for month end window dressing as people get into the names they have missed so far and that helps put a floor under prices and prevents a larger decline. If materials take a hit today due to the Asian pullback it could offer some decent entry points. Oil is also pulling back which should cause natural gas to sell off as well. I am hoping CHK comes down and I can get into it close to 20. I'll be watching coal names as well, ANR at 30 is a good entry point. I will likely choose some longer dated options and possibly some synthetic stock positions. One thing is for sure though is I will definitely be hedging any longs with more S&P puts or individual weak stocks but I need to find some.

On a side note, one pairs trade that I think could work out well in the future is Long AAPL and short RIMM. Both do perform together however when Apple finally has the Iphone on multiple carriers I think RIMM will be much more hard pressed to sell Blackberries, same with PALM. The other trade could be long AAPL and short T as they will no longer get guaranteed revenues from people wanting the Iphone.

Things are looking up again, I just need to manage risk as always and trade the way I know how and I should hopefully resume my forward progress.

Total Return for 2009: 137%