How the Bonds Act To Phil Fed Business Index

Due, to technical difficulties I was not able to track my trading today, but I did want to remark on how the bonds reacted to certain news today. Housing starts were down, as were jobless claims. Both further down than expected. This did not really effect the bonds though. The US Philly Fed business index came out at 12:00 with at 3.3 with an expected increase from 10.9 to 12.6. I am still trying to figure out the meaning of the Philly Fed business index but this significant drop caused an initial spike in bond prices followed by a quick fall off. In the future, the best course of action would be to close out all positions before this number comes out because it does effect bond price volatility greatly.

During the trading I was able to do, I was proud of my ability to keep tight stops, but because of the leverage in the 30 year bond, it was really easy to lose a lot of money within that tight stop range. I am going to consider a different entry strategy for the 30 than the 2, 5 and 10. I need to find a way to enter into a position and keep a tight stop that will not cause such great losses.

This has been a difficult couple of days as far as analyzing bonds movements. I'm interested to see if things get easier after the January FOMC meeting.