Last week September 2013 T-Bonds (CBOT:ZBU13) opened at 134-22 and close at 133-23 continuing the long term weekly drop that started in early May.

 “Big money” started bear moves heading into a long term bearish posture. This past week we saw a slight bull move with Dealer Intermediary adding to net shorts now at -63,278 contracts. Leveraged Funds dropped net shorts to -9,872 contracts and Asset Managers dropped net longs now at 154,454 contracts. Weekly Stochastics are in oversold territory and have been there since mid-May. This week we need to deal with a number of talking Fed heads. More talk of tapering will send T-Bonds continuing on the ride down.

If you need help understanding how to understand how to use the NEW COT report to your benefit get instant access to my new e-book "What Lies Beneath ALL Trends". It is filled with eye opening information.Commercial Net Tracker instructions: This form tracks the Commitment of Traders (COT) data for the commodity futures market. This form "looks" at the most recent five weeks of COT data and provides visual indications of the data. A) If the current value is at a 12-month low, the cell will display a red/burgundy background. B) If the current value is at a 12-month high, the cell will display a green background. C) If the current value went from net negative to net positive, the cell will display a blue background (indicating a bullish condition). D) If the current value is both a 12-month high and also went from a net negative to a net positive, the background will be green. You should view the data with green backgrounds to determine if they also went from net negative to net positive.

Proceed to Page 3 for this week's detailed fundementals...

Technicals

On the daily chart below you can see the very strong downtrend has weakened, but the market is once again starting to show signs of a strengthening trend as ADX is now at 25.4. The price range from the weakened trend is 136-132. MACD is flat, riding the signal line with no divergence and Stochastics are on the edge of oversold territory. Bears will want to see price action and closes below 132, the current range bottom. With all of the Fed heads talking this week, we may just see that happen this week.

Click to enlarge.

On the weekly chart you can clearly see how in the first trading week of May there were excellent signals to go short. The weekly close was below the 10 and 20 period EMAs, and DI- crossed over DI+ with ADX well above this. Weekly Stochastics started correcting from overbought territory.

Have a prosperous trading week.

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