On Friday, I posted my take on the Silver rebalancing and why I felt most of the downside pressure had been seen in advance of the actual rollover window.  Here is another aspect that I believe is an additional bullish factor for Silver in the very near future.  It has been widely reported and accepted in financial circles, that the major banks who have been short large numbers of silver futures contracts over the years, was led by J P Morgan and included other US banks.                                                                                                                                                                                                                                                                                                                                                                                                                                                                      That dynamic has switched with the US banks now largely long Silver futures, with 4 foreign banks being the big shorts.  Even if those foreign banks were previously part of the large 8 banks short for years, they too, now have to realize that they are left holding the bag as silver has rocketed to new all time high prices.  So do you think they are going to continue to swim against the tide and end up drowning, or are they looking for a chance to cover, accept some losses, and get out of their losing positions?                                                                                                                                                                                                                                                                                                                                                                                                The commodity index rebalancing, is the perfect opportunity to get out while they are still solvent.  When else was a large number of contracts going to be forced to be sold, in a short period of time?  If they are smart, those banks will use the rebalancing liquidation of long silver contracts  to cover their short positions.  What happens if that occurs?  Silver becomes a one way trade, almost all buyers, mostly for physical, because no one with half a brain, is ever going to go short  silver futures contracts, again.                                                                                                                                                                                                                                                                                                                                                                                                That means liquidity for paper contracts on the Comex dries up and the Comex(at least for silver trading) stops.  The silver market becomes largely physical, based in Asia,(Hong Kong & Shanghai) and largely explains why J P Morgan moved most of their precious metals operation to Singapore.