Silver price dropped about 16% today. I hope you did not buy silver in the last few days when the silver sentiment was extremely high. As I cautioned last Mon/Apr 25 that it looked like parabolic for sliver given how fast and significantly the silver price had increased within a very short period of time. People with big paper profits would always want to find some excuse to take profits. The news of the death of Bin Laden gave such an excuse. I bought more put options to hedge against a possible silver correction last Friday and its price started to drop in such a scale almost immediately. Did I time it so well? Not at all. I could not and no one could. It was purely a luck in terms of timing. But my gut feeling told me that I needed to hedge against the risk. I did not know exactly when it would come but I believed it was likely to come and soon. Coincidentally it was a perfect timing for me. So my paper profits of silver positions have been protected with the short positions.
Whether or not this means the start of a significant silver correction is dependent on the price actions in the next few weeks. One or a few days of price movement won't be sufficient for determining a trend. In the next few days, it is likely that the silver price may rebound. The sharp drop of its price was actually a kind of oversold, for which some sort of support is very likely. This is an uncertainty period of time and I'd still suggest that you do not buy or add new silver positions at the moment. I'm more inclined to think silver may have started a real and severe correction and I wish it could drop below $30 before I want to add more positions.
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