A move below $400 makes sense, as there are probably quite a few stops there from the people who got long recently. That would shake out the weak longs who piled in on the break to multi-year highs.
That said, nibbling from the long side makes sense if you view this as a correction in a bull market, and it is certainly better to be adding now than at $430 a week ago. I tend to be a bit greedy sometimes and hold out for better prices - sometimes I get them and it pays off, but other times I miss the bounce and have to get in considerably higher. A good example was when I held out for a move to around 100-110 in the HUI, and it bottomed around 112. By the time I got in I had missed almost 40% of the move.
So I think there is a lot to be said for scaling into weakness instead of trying to catch the exact bottom. You take losses during the final part of the correction, but equally you are guaranteed to participate if the market puts in a low earlier than anticipated and then takes off. If you don't take the risk, you might miss out on the reward. I now prefer to add 1/3 a bit early on the way down, 1/3 when I see the longs throwing in the towel, and the final 1/3 when the market makes a successful retest of the low, and then moves to a pattern of higher highs and higher lows. That way you spread your risk.
So I would be looking to nibble some time in the coming days, and then see what happens.
