muses of the moment

May 8, 2011

Latest Letter from Martin Armstrong dated May 6, 2011

Filed under: Economic Confidence Model Cycle, Gold and Silver Investing, Martin Armstrong, Precious metals — Tags: — totallygroovygirlfriday @ 8:46 pm

Click here for Martin Armstrong’s latest letter entitled The Silver Crash of 2011 (3 pages).

Mr. Armstrong talks about the short-term and long-term silver (and gold) price. A good read. Martin usually only talks about the trading channels of gold in his letters. This is a rare treat as he focuses on silver over the next 7 months  thru 2013.

Primary support in silver is $23.50-26.50. This is the key support level. If we have a monthly close below this range, we could be in a new down-trend in silver. A closing at year-end below $28 silver signals a decline into 2012.

Martin also suggests that the faster the decline, the better the possibility of a recovery and not a change in long-term trend. That drop in silver was pretty fast.

We shall see how things go from here to June.

Also gives specifics on gold. June 13-14, 2011 is still the key date to watch.

What groovygirl is doing in gold and silver in 2011

Filed under: Gold and Silver Investing, Precious metals — totallygroovygirlfriday @ 1:33 am

… the near term.

As you know, totallygroovygirl doesn’t day-trade gold and silver. And she has pretty much stopped short-term trading all together and only looks to the short-term charts for buying opportunities to hold physical metals long-term.

GG looks at her budget for the year, figures out how much money she can devote to physical metal investments, and then looks at the charts to see when during the year might be the best time to buy.

Groovygirl already has her savings/retirement invested for the long-term (I did that in 2005-2008). If you do not have a portion of your savings (15%-30% depending on your age) in physical gold and silver, get it now. No matter what the price.

For 2011, she is looking for the following trading ranges (she is already off the mark on silver):

  • Gold: 1320-1780 with an average around 1500. Bought some at 1400.
  • Silver: 21-48 with an average of 35. Since we closed so close to 50, I expect silver will go up past 50 later in the year, could continue upward. Bought a lot in January and February when it was below 25 and then below 31. (GG thinks for silver, anything under $50 is a bargain for holding long-term.)
  • Palladium: 700-1100 with an average of 900. This is a small paper holding for gg. Not holding physical at the moment, but that will change at some point in the future. Bought some at 750 and 775.

So, when money is available for precious metal investment during the rest of the year and the price is average or lower, groovygirl will buy physical gold and silver to hold long-term. As you can see from above, gg has made some gains and some loses short-term. But gg is un-phased, she looking to secure a long-term position for the coming currency crisis. Besides, sometimes, gg just doesn’t have the funds at the time of the best price. That’s just the way things go.

Please note that short-term markets are not groovygirl’s forte, there are much better analysts out there. Listen to them, not me. I am only letting you know what I am doing, as an example of my process, not an investment suggestion. And remember, do not day- trade silver and gold, hold long-term. Leave the day-trading to the Big Boys’ computers.

Groovygirl is planning on continuing this process thru 2013 (different ranges each year), then she will reevaluate where we are in the long-term bull market. As we get closer to a top, gg will not buy anymore, but hold, and then after that start to sell. That’s the plan. We shall see how it goes.

Update: in light of Martin’s latest letter on silver, gg is not buying or selling silver at all until June/July. Watching to see if the $26.50 support holds on a weekly and monthly basis.

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