The ASX Bull-Bear Leading Index signals a mild bear market.
Australian leading indicators have a 40% weighting in the ASX Leading Index, China 20%, and the US Leading Index carries the remaining 40%.
Forward Orders
NAB Forward Orders recovered to zero in May 2026, but the 3-month moving average remains below zero, signaling risk-off.
Housing Sector
The 3-month moving average of private housing approvals increased to 17.8K in June, from 16.6K in May, while the 3-month MA increased to 16.9K, well above the 20-year MA. The uptrend in the Australian housing sector remains strong.
A cross of 3-month MA values (navy) below the 20-year MA (red) would signal risk-off.
Financial Sector
The ASX 200 Financials Index (XFJ) is above its 50-week weighted moving average, continuing the risk-on signal.
ASX 200 Real Returns
The ASX 200 is above its 50-week moving average relative to Gold, but the long-term downtrend continues, with no higher troughs. The signal remains risk-off.
Performance of the ASX 200 Index relative to Gold (in Australian Dollars) reflects the real return on Australian Stocks.
China
The OECD Composite Leading Indicator for China eased to 98.57 in June, down from 98.91 in May. Values below 99.0 or a fall of more than 3 points from the preceding peak signal risk-off.
China is Australia’s largest export market, and the performance of the Chinese economy directly impacts the ASX.
Chinese Manufacturing
The Chinese NBS Manufacturing PMI fell to 49.2 in July, down sharply from 50.3 in June. Values below 50 indicate a contraction, and a fall below 49.0 would signal risk-off.
Conclusion
The Bull-Bear indicator signals the start of a bear market. Chinese manufacturing is on bear watch, with the NBS Manufacturing PMI falling to 49.2, close to its risk-off signal.
Related Links
Acknowledgments
- NAB: Monthly Business Survey
- ABS: Private Dwelling Approvals
- Trading Economics: China Business Indicators
- OECD: Composite Leading Indicators
- ABS: National Accounts