muses of the moment

July 1, 2011

Martin Armstrong’s 2011 Predictions-Mid Year Review

So, it is mid-year, let’s see how Martin Armstrong is doing on the predictions he made based on his Economic Confidence Model for 2011.

Martin Armstrong has perfect timing!! Yesterday he released a letter containing some predictions from now until the end of the year. He also talks about his Economic Confidence Model in more detail from now until 2016. Click here for the post and link to the letter.

Here is a reprint of the December 31, 2010 post which summarizes his conclusions. (Items in red are gg’s comments from today, July 1, 2011.)

Actually, Martin Armstrong hasn’t made any predictions for 2011. But he has mentioned some market perimeters in his letters of 2010. Statements in quotes are directly from Martin Armstrong’s letters.

Update January 5, 2011: Martin Armstrong’s latest letter, just received, dated December 22, 2010, has some updates to the info below. Click here for the full letter, market info is on page 7. Updates below are in blue.

Here we go.

DOW-neutral-higher

“When we look ahead to 2011, the resistance will stand at $12,500-$12,900 level followed by $13,340. The primary support begins as high as $10,608 level assuming we close above that level. (Which we have at $11,577.) This should be a very important pivot area even into 2012. Above the market, we will have this $11,800-$11,935 as critical pivotal resistance also for the next two years into 2012. Well below the market, we have the $7,400-$7,290 that will also be the major pivot support for the next two years.”

“The big turning point will be the June of 2011. If the DOW retests support precisely to the day, then we should see a very strong bull market thereafter going into the high for the top of the next 8.6 year wave in 2015.75.”

groovygirl’s comments: A high into 2015 could be inflation or dollar debasement, not actual real return on investment.

Update: Dow support at 9400. A buy signal required a close above 11927, which we did not get. But since it was close, it is a continuing bullish signal (or neutral) for the near term.

Since we did not retest support on June 13-14, 2011, we probably will not see a big rally in the DOW moving forward. We have not gone above the resistance at 12,900 (hitting a high this year of 12,809 in May), so he is correct in that respect as well.

PANIC CYCLE-2015

“Looking into the future, it does appear that 2015 is going to be a YEARLY PANIC CYCLE with massive huge volatility into 2016.”

groovygirl’s comments: A panic cycle doesn’t necessary mean a crash. It means extreme volatility, uncertainty, and panic. It is groovygirl’s opinion that 2015 is the year that the dollar dies.

GOLD-up

“The monthly chart shows a primary channel that stands at $1,400-$1,480 for 2010 and $1,480-$1,660 for 2011. It is this later channel on the monthly level that is likely to present the overhead resistance.”

“Looking ahead the main support lies at $1,030-$1,047 level. This will be the pivot support throughout 2011. This suggests that the broader long-term trend on a near-term basis will remain bullish as long as gold stays above this level for 2011.”

Click here for the Gold $5,000+ letter from 2009. The last 3 pages are very informative! Click here for the most recent letter about gold from 2010 (lots of good charts in this letter).

Gold is what investors buy when they are not confident in the economic climate/government policies. We have seen that type of buying in 2010, it will continue in 2011.

Martin sees the possibility for $5,000 gold by 2015. If that is the case, gold could rise in 2011 on its way to that number. But remember, expect volatility in the gold market, do not day-trade gold.

groovygirl’s comments: we are ending the year sort of in-between Martin’s channels ($1,421.60). Groovygirl is going to go with higher gold in 2011 trading within Martin’s upper channel prediction or between $1480-$1660. Silver has done wonderfully in 2010, ending the year at $30.91.

Update: Silver is bullish. Gold could retest support at some point this year, but will be at $5,000 by 2015.

Gold and silver stayed within Martin’s suggested trading channels so far this year. They are both up from the beginning of the year.

REAL ESTATE-falling

Same prediction as 2010. Martin is calling for a temporary bottom in 2012 and a rise in 2015. (This time line falls right in line with the remaining mortgages from the big bubble that must “reset” between now and 2013.) Then, a slow, very bad decline into 2030. (This time line represents reality hitting the bank balance sheets that finally start effecting housing prices in a very real way.)

This is a 26-year decline in real estate. So this means that the housing market is not recovering and residential and commercial real estate will be under pressure in 2011 as credit is still frozen within the banks balance sheets.

Click here for Martin’s letter on the Real Estate cycle. (Real estate information starts on page 8 with a chart.)

Real estate still not recovering. Confirmed.

DOLLAR-neutral-falling

“There is potential for a final low in 2011. A closing below 74.71 will signal that such a potential exists for 2011. Major resistance will stand at 80.80 and a closing below that number will signal that the dollar is still weak for 2011.”

Therefore, since the dollar closed below 80.80, dollar could still be weak in 2011.

On January 21, 2010, Martin has released a letter on the floating currency system and USDollar predictions. Click here (last few pages have specifics). His conclusion, extreme volatility and then a currency crisis in the USDollar in 2015.

Click here for a recent letter in which Martin charts all major fiat currencies.

groovygirl’s comments: there is a currency war continuing into 2011, as all fiat currencies try to debase at once. Expect all currencies to race up and down making everyone ill. Many economists are predicting a much higher dollar next year because of the euro issues. However, groovygirl is a long-term investor and if the dollar isn’t going up to its 2001 levels (which it won’t), it is still in a major downward trend and is still losing purchasing power.

Update: Euro should remain neutral and dollar should fall some.

Dollar has fallen, then recovered some (mostly in reaction to the euro situation) since the first of 2011, but remained weak as suggested. So, he is right again.

groovygirl’s comments

Nothing much has changed, more of the same in 2011 as the debt crisis is not fixed. Groovygirl will keep a look out for Martin’s next letter to see if there are any updates/modifications to the information presented here.

Martin is correct in his predictions so far this year. Well done.

More comments from groovygirl:

A reader asked for gg’s opinion, so here it is. Groovygirl thinks that the rest of 2011 will be progressively bumpy with an air of uncertainty and increasingly poor “official” economic stats. The global economy is under extreme pressure, but gg is not sure we will have a break in the next 6 months, but rather a building toward a break. And when I say break, I mean something like 2008. 

I think gold, silver and oil will continue to rise after this plateau,  and the DOW will bounce around $12,000 or correct slightly (10-20%). It think that “debt default” is the phase of the year, as everyone realizes the real economic issue, too much debt globally. I don’t think people will really panic about the debt problem until something breaks down again. I don’t think the average investor knows how to protect himself even if things should break down again. So not knowing, will create inaction or panic selling at the wrong time.

The dollar’s reaction to the European debt crisis has been very interesting. Although China is buying the euro, the dollar really hasn’t taken off as a safe haven as you would expect with a crisis in Europe. So, gg is thinking that gold and silver are really playing a major role as a currency in trading (as well as store of value) and stealing trade from the dollar.

QE will continue formally or informally, right now it is bailing out Europe again. More QE means continued inflation in prices for the long-term.

Martin Armstrong has experienced first-hand the corruption of the justice system for telling the truth. Here and here is another case. There is a complete breakdown in the rule of law in this country. Educate yourself and make your own decisions about what is going on around you.

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12 Comments »

  1. Thank’s for the explanation what Martin is saying and your own thinking!

    Comment by daan — July 1, 2011 @ 11:30 am

  2. Daan,

    Thank you.

    gg

    Comment by totallygroovygirlfriday — July 1, 2011 @ 1:51 pm

  3. A great compilation of Armstrong’s material, supplemented with you own informed conclusions – more substantive IMO than the majority of paid letters. Thanks GG!

    Comment by Lore — July 2, 2011 @ 2:51 am

  4. Second here, gg. Just discovered your site recently. Very good job. Thank you!

    Comment by benmark — July 2, 2011 @ 2:18 pm

  5. I hope he gets a much bigger platform so we can start to have real awareness and discussion of what’s going on in the real world.

    Comment by Anonymous — July 3, 2011 @ 4:15 pm

  6. Thanks for reading Lore.

    gg

    Comment by totallygroovygirlfriday — July 4, 2011 @ 11:14 am

  7. Thank you for your comments.

    gg

    Comment by totallygroovygirlfriday — July 4, 2011 @ 11:14 am

  8. Agreed.

    Comment by totallygroovygirlfriday — July 4, 2011 @ 11:17 am

  9. GG,

    This is the best article of the year from both Martin and you! Thank you! I’m actually incorporating Martin’s ECM in to my company’s “foresights” efforts. The “miss” that I have right now is WHAT to do with the information and how to apply to my company and to me.

    Are you familiar with Gerald Celente and the work that he does with the Trends Research Institute? He REALLY has the pulse of what is going on. Whereas Martin can show us the cycles, Gerald puts it in to reality and what it means. I wonder if they have ever met and discussed their work together. That woudl be a meeting of the minds!

    Comment by mikemc — July 5, 2011 @ 10:49 am

  10. Thanks, Mike.

    Yes, I know of Mr. Celente’s work. He is very good at predicting trends, especially global social trends. I am so glad that you are trying to incorporate some of these things into your business. I don’t think many businesses are thinking long-term or thinking about how to survive a currency collapse.

    I have read the only book I can find on doing business during a hyperinflation (or currency collapse). It is The Hyperinflation Survival Guide by Gerald Swanson. Amazon: http://www.amazon.com/exec/obidos/tg/detail/-/0974118001/lewrockwell/

    This book deals with purchasing and selling during extreme global currency volatility. Since most Americans do not understand how currency affects all business, just studying currencies would help.

    The things I learned from this book:
    Everyone (not just accounting and purchasing) in your company needs to understand how hyperinflation affects your business.
    You will need large stores of cash during a credit crunch. But you will need to have that store of cash in an interest account that compensates for the loss in purchasing power. This is the major issue for today. Interest rates are low, so businesses are storing cash in money markets that invest in risky assets like Greek debt. I suspect a diversification of gold-silver-other currencies-money market funds-CDs will take the place of just money market funds as a store of liquid cash. This will have to be monitored on a daily basis. There will probably be a full time job in your company just for this process.
    Your company will need 2 sets of books: one official set in your own currency, one that is inflation-adjusted. This one could be an inflation-adjusted dollar or tracked in a gold-dollar ratio. And your CFO will have to constantly be monitoring the books daily. One price change on a raw material (oil) and you could be insolvent.
    Contracts will need to be re-written for price adjustment changes on the buy side and sell side. Prices will adjust monthly, weekly, daily.

    Thanks for your comments,
    gg

    Comment by totallygroovygirlfriday — July 5, 2011 @ 12:03 pm

  11. Great!!! Love This Site,Thank You For All The Info.

    Comment by income opp — December 9, 2011 @ 4:47 am

  12. [...] Click here for the mid-year review of Martin Armstrong’s 2011 predictions. [...]

    Pingback by A Review of Martin Armstrong’s 2011 Predictions « muses of the moment — December 31, 2011 @ 7:09 am


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