When you get waxed 30% in a couple of weeks, what good news could there be?
Here’s the bright-side – for the silver bulls that didn’t get margin called, you’ve seen solid support at the 50-day moving average (blue line below) over the past 24 months:
Everytime silver has touched its 50-day MA over the past 2 months, it’s bounced off it.
The bad news? It’s another $8 down to get there!
To put things in perspective, a correction down to $27 would put silver at its 50-day MA. It’d have to correct all the way down to $18 to get to its 200-day MA.
Silver was WAY overdue for a correction, so this recent price action is not exactly surprising (except for those, myself included, who wonder what took so long).
Everyone’s favorite silver stock, Silver Wheaton (SLW), had more of a measured rise. As a result, its recent decline has not been as violent, either.
Silver Wheaton, a silver royalty company, is everyone’s favorite “call option on a call option”.
I hope to use this correction – however long or deep it is – to dollar cost average into some Silver Wheaton. If you believe the longer term silver bull market remains in play, SLW is a well run company with a favorable royalty-based business model, that’s well worth checking out.
And as you can see from the chart above, there’s no shortage of price action!