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Guru's eerie forecast from stars, IChing
Monday 24 September 2001

The Sydney Morning Herald

and The Age (in Melbourne)

As everyone looks to New York for steadiness after a horrific week for
markets everywhere the only question in Australia and all global financial
markets is "how much worse can it get?"

The only answer here is that no one knows, although there are a lot of
opinions, a lot of guesses and mainly a lot of shrugged shoulders.

The only man who did predict a market plunge and terrible events
including war around September 11 is not very hopeful.

Arch Crawford, the ex-Wall Street master technical analyst who now

combines stock charts with astrological charts in his "Crawford
Perspectives" newsletter, told his clients back in August to go 100 per cent short - to
sell every share they owned and sell just as many that they didn't own
with the intention of buying them back when prices fell and keeping the

Sitting in the sun in the park on the day before the World Trade Centre
attack, I almost fell off the bench reading his just-arrived September
newsletter. The headline was "Crash by October 5th?" and the text referred
back to his prediction in May last year of a "bloody bear market" in six
to 18 months.

"We are faced with the THE DARKENING OF THE LIGHT (his capital letters)
according to a much older Chinese tradition, The I Ching, or Book of
Changes," wrote Arch just before the terrorist attack.

"Henceforth, the surprises will manifest on the Dark side of the Force!"

He predicted planetary movements on September 8 would be "leading as to
that the ninth would be another turning point for markets and that
financial markets could be occulted (hidden) on the 10th to 12th.

He is not very hopeful now because he has not altered his major
outstanding prediction at the start of the month. It is for October 2,
"when Mars conjoins the July 5th lunar eclipse". The prediction reads:
"For the US - WARLIKE! ACTION! Affects $US on world markets!"

Arch's reasoning for the market predictions was based partly on technical
analysis - which suggested that a "cascading capitulation phase" was
possible - and largely on looking at the positions of the stars and

That's not what the major investment banks do, of course, but it's
always worth reading what Arch has to say because experience has shown that
he can be more right than the rest; which is why he is always among, and often
leads, the Top Ten ranks of market-timers even for five and 10-year periods.

He did predict the '87 Crash. He did get the 1994 bonds crisis.

He did forewarn of the approaching Tech Wreck last year - and he also got a lot
of the upswings too. Nor is he always bearish.

After an early April buy signal this year, for example, he increased
positions in early May, was 200 per cent long using full margin borrowing in
July and then reversed to 100 per cent short.

All this might seem a bit off-the-planet, but it is no more so than the

buffeted currencies, tumbling commodity prices, soaring short-term bond
prices, plunging share prices and volatility, volatility everywhere that
have exhausted people who already were drained by the horrible drama that
unfolded in New York in the previous week.

Their shrugged shoulders became sagging shoulders too last week as hectic

working days were broken by poignant and tearful memorial services for
many of the more than 6000 people who perished in such a terrifying way.

Maybe some of the turmoil last week was because many people just didn't
have their hearts in it. Somehow it didn't seem to matter all that much
when the Dow Jones Industrial Average dragged itself past the closing bell
on Friday with a freefall of 1367 points across the five sessions.

It was the key blue-chip index's worst week since the Great Depression, a
fall of 14.3 per cent that doubled to 28 per cent the tumble from its high
in May.

Nasdaq's Composite Index plunged 16 per cent over the five days,
extending the fall from its most recent high in May to 28 per cent and
taking the drop from its all-time record high to more than 70 per cent.

This week starts with an estimated $US1.38 trillion ($A2.84 trillion)
wiped off the value of the whole sharemarket since trading resumed last
Monday, with the New York Stock Exchange surrounded by troops, armored
personnel carriers and the tightest security ever seen on Wall Street.

It also starts with the volume record books rewritten to show that five of
the NYSE's 10 busiest days occurred last week with Monday holding down the
top spot and Friday sitting second.

In itself that seems to suggest that an effective (if-untalked-about)
support program was operating all week to parachute the market gently -
and presumably it will be there again this week if stocks are hammered

There's no point thinking about the reasons for the panicky sell-off,

ranging from war and economic uncertainties to fears about corporate
earnings plunges and consumer pullbacks as layoffs mount to two million etc,
because we're in a frozen moment in time.

No economist, analyst or strategist on Wall Street can predict anything
about any of that with any confidence. Nor can anyone truly know whether
the heavy redemptions of equity mutual funds that continued last week will
turn into a tide; whether the selling by foreigners will continue; or whether
the wide-scale margin calls that prompted a lot of forced selling last week will

Around this city most people are more concerned about whether the much
rumored second wave of terrorist attacks will eventuate ... and their
concern has more to do with the lives of their loved ones than worries
about whether further attacks might steepen America's slide into recession.

FOOTNOTE: This column is dedicated to UBS Warburg's Scott Saber - a

joyful man with a strong sense of right and wrong who loved family, children
and friends, and in his last moments at the top of the World Trade Centre gave
his cellphone to strangers so they could call home.
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