muses of the moment

December 31, 2011

A Review of Martin Armstrong’s 2011 Predictions

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

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

Here is a reprint of the December 31, 2010 post which summarizes his conclusions.

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.

2011 year end DOW was 12,217, we are still hitting Martin’s resistance level.

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.

Martin has commented that Panic Cycle still set for 2015.

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 ended the year within Martin’s suggested trading channels at 1566. But jumped up over $1660 to a new high of $1900. With silver at 27.87, they are both up from the beginning of the 2011.

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. In fact revised housing data in December makes things worse. Martin’s prediction is 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. Still hitting resistance at $.80. Closing the year at $.80. Martin is correct again, a weak dollar this last year.

groovygirl’s comments

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

Groovygirl will comment on Martin’s 2012 predictions on Sunday’s post tomorrow.

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3 Comments »

  1. if a person makes the channel wide enough then he has a greater ability to be right .. but gold on the upside he was wrong .

    on its down side he maybe is wrong again .. but he gives him self a lot of room to fudge the results ,

    but wait .. armstrong never seems to see the gross manupulation of gold .. but i guess in his world it is all part of the cycles . and in his world if we just had honest people then no need for a gold standard .

    but in his world their has never been honest people ..so there in in lays the rub ..

    conclusion the gold backed curriencies need fewer honest people .. and for a time until the power thirsty get their hands on the jeckle island process.. why pay a brokers fee of 6% for the printing press . .. and keep the process with in the confines of honest money .

    or have two systems the gold or fiat .. give the choice to the market .. soon all transactions will be in gold . and the funny money will find its place along side the paper of history

    a biill of exchange tied to gold .. will allow for the transaction of the market place . and make it flexable enough so a person does not have his pockets full of gold coins . .. But looking back it was never a problem using silver as a coin

    even into the late 1950s early 1960s .. evdry one had silver .. and the world went on and little was lost in buying stuff .

    Comment by Anonymous — December 31, 2011 @ 6:27 pm

  2. Great summary – thanks! Martin has done an excellent job of forecasting in 2011. I’m looking forward to his predictions for 2012.

    Financial Sense has posted an interview with attorney James Koutoulas. James is the attorney who started the Customer Commodity Coalition which represents over 8,000 former customers of MF Global.

    http://www.financialsense.com/node/7250

    Warren Pollock has also posted an interview with James Koutoulas.

    Finally, here are a couple of commercials you might enjoy. The MSM has refused to air these commercials.


    Happy New Year!

    Comment by sw — December 31, 2011 @ 7:19 pm

  3. Good links!

    gg

    Comment by totallygroovygirlfriday — January 1, 2012 @ 11:09 am


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