SILVER

March silver looks to enter the new trading week right on the December 28th highs and in what would seem to be a bullish track. In addition to positive global economic expectations from favorable scheduled data flows overnight and positive Chinese monetary dialogue, the bull camp in silver appears to have a quasi fundamental edge. With March silver also taking out a series of chart resistance points on the charts this morning, it is possible that silver is set to see some minor technically related buying action. However, silver has to hope that positive economic dialogue will be enhanced through the scheduled US data window and that fear toward the euro zone is kept on a back burner. Comex Silver Stocks at the end of last week were pegged at 117.299 million ounces for another noted gain of 607,290 ounces. Comex Silver Stocks are now at the highest levels since June 17th of 2010. Silver stocks have increased in 14 of the last 20 days. The Commitments of Traders Futures and Options report as of December 27th for Silver showed Non-Commercial traders were net long 11,028 contracts, a decrease of 584 contracts. The Commercial traders were net short 18,537 contracts, a decrease of 1,154 contracts. The Non-reportable traders were net long 7,508 contracts, a decrease of 572 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 18,536 contracts. This represents a decrease of 1,156 contracts in the net long position held by these traders. Initial upside targeting is seen up at $29.20 in the March silver contract, with even higher targeting possible today up at $29.43. In order to maintain a positive track, March silver will need to see favorable US economic data points and positive progression on the upside in US equity markets. For silver, Iranian dialogue could prove to be a double edged sword, as fear of soaring oil prices could ultimately undermine a host of physical commodity markets. At least to start the new trading week, we can't rule out a temporary retest of the $30.00 level in the coming three trading sessions.