Arch Crawford's last newsletter.......
VITAL SIGNS
Those who used the DJIA stoploss are back IN 200% SHORT on the drop to 10,700 ( hourly print
basis ) on Monday, May 24, and a new stoploss at 11,500 closing basis. The S&P500 watchers
have remained 200% short without interruption as their stop is at 1520.00.
We have basically five positions showing the degree of our Bullish ( positive ) or Bearish
( negative ) orientation towards the market. Those five are: Long ( in ) using margin, Long without
margin, neutral, Short without margin and Short using margin. We continue this month with
maximum negative stance i.e. Short using margin!July 6, 1999 Vol. 99/07
OUR METHODS INDICATE THE FINAL TOP IS NOW!
This week's record DJIA gain of 586 points into the long Holiday weekend high smacks of window
dressing for the end of quarter, a seasonal reinvestment, and a Bear Trap of Momentous Proportion!
Despite New High levels in the Major stock Indices, the NYSE Advance-Decline line is –1478 from the May
13 previous high, rendering a considerable non-confirmation. The A/D Line itself remains down near the
lows of last October, proving the Lie of a new HIGH in the general market. Although the 10-day New
Highs list has finally surpassed the 52-week New Lows, the 10-day New Lows remain at very high levels
( now 70.5 ) while most analysts consider 40-plus as dangerous. At the same time, NYSE New Highs list has
been unable to supercede ANY previous peak, evincing extreme long term weakness. ( Chart last shown on
front of the May 10 CP-It hasn't gone ANY higher! ) Last month ( page 3 ) we showed 2 charts pointing up
that while the 5-day ARMS/TRIN Index was relatively high ( strong ) , the CBOE Put/Call ratio was low
and weak and we conjectured that a rally was probably due but that indicator configurations were not
strong enough for a new Impulse Wave for adding additional Bull Legs to the overall market. In this
frame, the ARMS and Put/Call are confirming each other, as both drop into deep Overbought readings.
We contend that this new high in the majors, unconfirmed by almost all technical considerations, is a farce
and a fraud, and will NOT be able to continue, NOT EVEN ONE MORE DAY!! In this case, 5-day Arms
( TRIN ) is breaking to levels generally associated with market highs, while the 3-day CBOE Put/Call ratio
has just broken to low ground untouched FOR YEARS! ( Chart this page – indicates immediate SELL! ) In
addition to serious Interest Rate concerns, Sentiment Indicators are giving the loudest warnings. BEARS
have continued to decrease, even as markets tumbled, and Hot Stocks were cut in half. The report of
Consumer Sentiment this week confirmed an 8 th month of increase to the highest levels in 32 years. Mr.
Greenspan on TV goes on & on about a BUBBLE that may or may not exist. “Do you see a bubble? I don't
see a bubble!” His actual mention of a potential bubble, much less his dwelling on the possibility is a grave
danger signal, as is the Rubin retirement. Our belief is that he sees the danger and is getting out of harms
way. Besides, since the IPO, Goldman doesn't need him there anymore. Incidentally, even Abby Joseph
Cohen, their market guru, is giving positive projections. If you notice the small print, it's the Least Positive
she's been in several years. The Most Important Period of this year, as far as the stars are concerned, is not
Y2K-day, it's the upcoming Eclipse series and accompanying massive configurations. About this
momentous occasion, the French psychic Nostradamus wrote 430 years ago: “In the year 1999 and seven
months ( old style ) , From the skies will come a King of Terror, To raise again the King of the Mongols
( China? ) , Before and after, Mars ( God of War ) shall reign at will. Although the psychic world speaks to us
more in riddles, which can be easily understood only after the fact, the timing of this one is hard to escape!
In addition, the riddlers, with their computations on these quatrains, say the next Pope will be the last! We
recommend additional security for all world leaders during this powerful interlude! So what's really going
to happen here? Our best point-for-point analysis appears on page three, and in the “ASTRONOMIC
ACTIVITY” calendar on the back page. The BIG PICTURE though, may include one or more of the
Nightmare Scenarios pictured by those who attempt to pierce the veil of the future. ( 1 ) Natural Disasters
including Earthquakes, Tidal Waves, Tornadoes, Hurricanes, Flood, Famine; ( 2 ) Man Made Disasters of
Chemical, Biological or Nuclear War or Accident; ( 3a ) Financial Meltdown signaled by Chinese
devaluation, or the unwinding of the Yen-$US carry, either of which could lead to repatriation of monies
held in U.S. Treasuries, or ( 3b ) Financial Meltdown caused by reversal of the huge GOLD SHORT, either
of which could catch Hedge Funds in vulnerable positions; ( 4 ) MAJOR WAR involving blockage of OIL
flow from the Middle-East; and finally ( 5 ) Y2K related Panic and Bank Runs. These are dates most likely to
bring the dirty laundry out into view: July 14, 21, 26-28, August 5, 7, 11, & 17.
2
INTERNAL MARKET INDICATORS CLEARLY OVERBOUGHT!
Chart ( 1 ) $TRIN is an oscillator consisting of a 55-day moving average of the ARMS Index ( TRIN ) minus a
21-day moving average of the same. Downside momentum has been halted at an extreme oversold and a
move to overbought has been accomplished with little passage of time. Most positive action would be to
return to neutral levels, then begin another advance from there. As this appears to be an oversold bounce
in a Bear market, we are skeptical that this present action can be sustained.
Chart ( 2 ) $$ADCL is a 10-day moving average of the net change in Advances-Declines ( NYSE ) . This one
rallied above, then dropped back below its Sell-ready line, rendering an actual short term Sell signal.
However, it has re-instituted its pattern of “rising bottoms” evident since last August with the one
exception early this year. This one appears to be past a high but requires a “lower low-lower high”
combination to confirm a downtrend. We now have the lower low in place. A rally now to a “lower high”
will set up a potential “killer” downwave! A downturn from here will put the nail in the coffin.
Chart ( 3 ) $$SPRY is a measure of "smart money" action in the S&P futures. Pretty much a neutral range
over the last two months. A move back toward the high ground has left this one vulnerable to at least a
pullback. We think the recent rise is a head-fake leading to an immediate downtrend.
Chart ( 4 ) $TICK is Closing TICK ( NYSE 10-Day ) . Quite similar to $ADCL, It has also made a much longer
series of lower highs after an extreme overbought. The recent up leg has the pattern of an A-B-C upward
correction, which should soon revert to a Major Downtrend.The last TWO months we said here: “These
indicators point up a far more dangerous condition than do the very short term hourly statistics which are
quite positive for the next few days…Often, a final run to new market highs will give enough impetus to
break the worst of these patterns, but, as long as internal dynamics and cycles remain weak, we will not be
shaken out on the very last gasp of strength.”
The next three days saw the “last gasp of strength” run up into May 13 to new highs in the DJIA and the
S&P500, unconfirmed by the NASDQ or New Highs-New Lows, only a very minor rally high in the
Advance-Decline Line, which was an even weaker failure, when measured by the Advance/Decline
Ratio!” This time, we are convinced the “last gasp of strength” has been completed as of Friday and we
look for an immediate downward reaction which will shortly propel markets into the expected
Capitulation Phase!
Also in the June newsletter, we said…”THIS IS IT, FINAL!!” Now, here we are saying it again. Long term
top patterns can be very tiresome and very frustrating. They tend to take a long time to form and are slow
and rounding and when you least expect it, markets run up to just one more high in Major Averages, often
unsupported by any technical data, or worse, just enough to inject doubts into the scenario. An old Wall St
saying is “The market will do whatever it needs to do to fool the most people.” Remember, topping
patterns consist of the action of “Smart Money” distributing or selling to the “Not so smart money” and
they want to keep the game going until the last farthing has been extracted!
The negative power of the astronomic work begins affecting us mightily in the period just ahead!
3
MAJOR INSTABILITY
The WORLD will get a strong dose of MILLENIAL MADNESS during the coming Eclipse series. Political,
Military and Social unrest at maximum with Economic and Financial repercussions aplenty! There may be
surprise attacks across national borders, possibly involving Israel, and assassination attempts on world
leaders, possibly including the U.S. We do not say these things lightly. This sequence of T-squares and
Grand Crosses among the “wandering stars” is unprecedented in our lifetimes, and maybe for Millennia!
Do you think we are ALARMIST? Can we frighten you into taking SOME MODICUM of defensive
measures, personally and financially? If you're waiting for greater proximity to Y2K before tightening up,
DON'T! Whatever you might be coerced to do for your own safety…DO IT NOW!
Remember that we have a long history of predicting dates of astronomic moment which have often
coincided with monstrous world events! Not all of these predicted events affected our markets. Many did.
Among the greatest planetary alignments we brought to readers attention were: Top day before the
“October Massacre” of 1979, Biggest point decline in history ( to that date ) in 1986, Exact date of the
Challenger explosion, Exact high day before 1987 CRASH, Exact day of KOBE Earthquake, Lunar Eclipse
conjunct Pluto 2 days before Chernobyl explosion, Lunar Eclipse forming Grand Cross when Saddam
Hussein attacked Kuwait, Saturn square Neptune date of “Hunt Debacle”, Saturn square Pluto date of
Chiapas Uprising, Saturn semi-square Neptune date of Peso devaluation, Saturn/Neptune conjunction
opposed Jupiter 2-3 days before Berlin Wall came down, Exact date of drowning of 900 in ferry accident,
date of Diana's death…AND MANY MORE!
THE NEXT 60 DAYS WILL MAKE ALL THESE LOOK LIKE A WALK IN THE PARK!! Never, Ever have
we observed combination after deadly combination culminating one after another in a truly apocalyptic
sequence. To those among the spiritual or religious communities, some of whom are planning gatherings
for the Solar Eclipse, I give this advice: “START SOONER AND PRAY HARDER!” To those who believe in
nothing, I give this advice: “If there's something you have really wanted to do and haven't done yet…DO
IT NOW!” If there is someone you haven't told “I love you!” best to do that now, as well.
Although the sequence has already begun building, it can be observed openly by July 18, and even the
dull-witted will come aware by July 21 that something is amiss. The Biggest Events will most likely occur
Monday, July 26 when the first T-square forms involving Sun/Mercury conjunction opposing Neptune, all
square Jupiter! This is extremely inflationary and will disrupt currencies and financial markets. Possibility
of chemical spills, deception, germ warfare and tragedies at sea. Then comes the Lunar Eclipse on the 28 th
conjunct Neptune and square Jupiter = More of the same! The third T-square reaches maximum energy on
Saturday, August 7. This combination of Sun opposing Uranus, both squaring Mars symbolizes Open, In
Your Face Confrontation, Warfare, Explosive Tempers, Explosive Hardware!
August 11, 1999! This is THE BIG ONE, The MOTHER of All Solar Eclipses about which the 16
th Century Seer, NOSTRADAMUS wrote: “A king of Terror will come from the skies…”.
Ebertin's Combination of Stellar Influences” says of Mars/Saturn = Uranus: “The ability to give as
well as to take under provocation, the inclination to apply brute force, A test of nervous
strength, the Intervening by Higher Power, separation, death. DELL HOROSCOPE Magazine
opines: “This eclipse might augur a paradigm shift of global proportions.” Richard Giles writing
for Gordon Michael Scallion's Earth Changes Report adds: “What's at stake here…is the basic
stability and strength of the free market system. Struggles for control of the world economy and
issues of ownership of the world's resources are in the balance. War over land and rights to
resources are very likely. … Neptune in Aquarius will foster a mystical and humanitarian
revival of the world at a mass level, offering many people their first transcendental glimpse of
the planet. … in late July expect people claiming to be a messiah to emerge. This energy also
favors sudden reversals of fortune in the markets.”
The greatest after-shocks are triggered with the formation of a second Grand Cross on August
16-17 involving Jupiter, Neptune, Mercury and Moon. How many thousands of years since we
have encountered a Double Grand Cross? The Pluto station on the 18 th will aggravate
underground movement and likewise, the realignment of power structures, physical and social.
Further powerful astronomic hits on August 24, 26 and 29 add to the general chaos of this
intense period!
Crawford Perspectives is published 12 times per year. Sources of information are believed reliable, but are in no way
guaranteed. Opinions and recommendations are given with the understanding that our sophisticated investors are aware
of the risks involved. Crawford Perspectives is written and published by Arch Crawford. ã 1999 Arch Crawford. All Rights
Reserved. |
