Silver COT Report 12/23/11

The total commercial net short position decreased by 5,480 contracts to 14,825 contracts in the week ending 12/20/11.  This is the smallest net commercial short position in silver in nearly a decade!  To put this number in perspective, silver was trading under $5 an ounce the last time the commercial net short position was a mere 14,800 contracts!  Think about this for a moment.  While the COT report is not precise on timing of price moves (and the COT could become even more bullish than current levels), we currently have the most bullish commercial net short COT numbers in silver since 2002!!  Unlike the speculative price chasers, the large commercial banks are almost always on the right side of short term moves, in large part as a result of the day to day manipulation of prices.  The latest COT report tells me that the banksters are getting ready for a big move to the upside in silver.
Ted Butler estimates that JP Morgan has now reduced their naked short position to roughly 13,000 contracts, or 65 million ounces, which would be The Morgue's smallest naked short position in silver since it picked up Bear Sterns' shorts in early 2008.  With the news that the CME is waiving reporting requirements for positions exceeding speculative limits till at least May 31st 2012, we remain skeptical that JP Morgan is in fact getting ready to end its alleged manipulation of silver, but we will find out soon enough on the next price rally.  If the net commercial short positions markedly increase from 14,825 into the next major price rally of silver, we will know that nothing has changed, and that The Morgue is certainly not attempting to extricate itself from its massive naked short silver position. 
If hard position limits are to eventually become a reality however (obviously only after JPM is able to completely extricate itself from another 9-10,000 shorts to reach compliance), we should see the commercial net short position remain somewhere near 15,000 contracts into the next major price rally in silver. 

Silver COT Report - Futures
Large Speculators			Commercial		Total
Long	Short	Spreading	Long	Short	Long	Short
24,302	16,874	17,979	40,017	54,842	82,298	89,695
-1,270	4,969	803	4,388	-1,092	3,921	4,680
Traders
58	38	43	38	42	121	106
	Small Speculators
	Long	Short	Open Interest
	18,867	11,470	101,165
	-1,067	-1,826	2,854
	non reportable positions		Change from the previous reporting period
COT Silver Report - Positions as of				Tuesday, December 20, 2011

Silver COT Report - Futures & Options Combined
Large Speculators			Commercial		Total
Long	Short	Spreading	Long	Short	Long	Short
24,826	13,214	41,811	52,154	71,845	118,791	126,870
-1,481	4,709	4,010	6,620	1,144	9,149	9,863
Traders
73	39	68	42	46	147	128
	Small Speculators
	Long	Short	Open Interest
	21,012	12,932	139,802
	-1,433	-2,147	7,716
	non reportable positions		Change from the previous reporting period
COT Silver Report - Positions as of				Tuesday, December 20, 2011