Author: Colin Twiggs

Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters. Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis. Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events. He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.
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Crude Oil Spikes But Gold Falls

Key Points

  • Iranian missiles damaged Qatar’s Ras Laffan Industrial City, the world’s largest LNG export facility.
  • Brent crude futures spiked to $115 per barrel.
  • The Fed kept the fed funds target rate unchanged at 3.50%-3.75%.
  • Gold is testing support at $4,800 per barrel.

From CNBC:

Qatar said Wednesday that Iranian missiles caused “extensive damage” at Ras Laffan Industrial City, home to the largest liquefied natural gas, or LNG, export facility in the world….

Qatar halted LNG production on March 2 due to Iranian drone strikes at Ras Laffan and Mesaieed Industrial City. The Gulf state is the second-largest LNG exporter in the world, after the US Qatar accounts for nearly 20% of global LNG exports, according to data from energy consulting firm Kpler.

Iran is also attacking oil export facilities outside the Persian Gulf to further restrict global energy supply. From Reuters yesterday:

Omani ​crude – exported from a terminal outside the Strait of Hormuz – is trading at a record premium of $51 a barrel to Brent, compared with an average of just 75 cents in February, pushing the outright price to around $150 a barrel for May ​loading.

A similar pattern is playing out elsewhere. Cash premiums for Dubai crude jumped to $56 a barrel on Monday from an average of 90 cents in February, according to data from S&P Global Platts and Reuters.

The surge reflects the enormous uncertainty over the actual amount of supply available amid repeated Iranian strikes on oil terminals in Oman and at Fujairah, the United Arab Emirates’ main oil-exporting terminal outside Hormuz.

Brent crude futures (ICE May’26) climbed to $115 per barrel.

Brent Crude Futures

Fed Monetary Policy

Meet the new head of monetary policy at the Fed.

Iran's Supreme Leader: Mojtaba Khamenei

Spoiler alert: it’s not Kevin Warsh. Iranian cleric, Mojtaba Khamenei, recently appointed supreme leader of the Islamic state, now dictates global monetary policy.

Iran’s chokehold over Gulf states crude oil and LNG production will dominate global employment, inflation, and liquidity for the foreseeable future.

The Fed was on track for further rate cuts, with financial markets expecting three cuts by year-end as the economy slowed and the labor market shed 92,000 jobs in February.

Employment Growth

However, the attack on Iran has flipped the script. Rising crude oil prices are expected to increase inflationary pressure and restrict the Fed’s ability to cut rates.

Core PCE inflation, the Fed’s preferred measure of underlying inflation, had already increased to 3.1% for the 12 months to January 2026, from 2.6% in April 2025.

PCE & Core PCE

Rising energy prices (LHS) will likely cause a spike in CPI (RHS) similar to the increase in 2021 and ’22.

CPI & CPI Energy

Moody’s Baa corporate bond spread climbed to 1.85% on March 17, warning of tighter liquidity in financial markets.

Moody's Baa Corporate Bond Spread

The S&P 500 retreated to 6,625 following news of renewed Iranian attacks. We expect a test of primary support at 6550.

S&P 500

Copper broke support at $12,500 per tonne, anticipating a contraction in demand as the global economy slows.

Copper

Gold broke support at $5,000 per ounce, finding short-term support at $4,800. Axel Merk attributes the recent sell-off to “deleveraging among speculators, global growth headwinds, and an oversold condition in some markets after a very strong January run-up.”

Spot Gold

However, there was a similar sell-off in March 2020 (below), shortly after the outbreak of the COVID-19 pandemic. A liquidity contraction and the rebalancing of risk-parity funds caused a sell-off across all major asset classes, including stocks, bonds, and precious metals. Gold recovered in April, rallying to $2,050 per ounce by August 2020.

Spot Gold

Gulf states could also be liquidating reserves to support their economies while oil exports are restricted.

The monthly chart below shows the long-term uptrend since March 2024, when gold broke out above resistance at $2,000. We are now witnessing a pull-back to test primary support at $4,500. Respect of support will likely signal another strong advance.

Spot Gold

Conclusion

The Fed is powerless to fight inflation caused by the Iranian chokehold over global energy supplies. They are also constrained in their ability to use monetary policy to support a weak labor market because of the looming threat of inflation.

Our bullish thesis for gold remains. Precarious sovereign debt levels limit governments’ ability to support their economies without fueling inflation. Political leaders are also reluctant to adopt more restrictive fiscal policy because of the impact on their economies. The outcome will likely be prolonged currency debasement through inflation, with gold bullion eventually replacing US Treasuries as the global reserve asset.

Acknowledgments

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US Market Snapshot

Bull/Bear Market Indicator
Stock Market Pricing Indicator

The gauge on the left indicates whether the market is in a bull or bear phase, and the indicator on the right reflects the current valuation of the stock market. Stock market pricing indicates whether stocks are cheap or expensive in relation to earnings, but it is a poor indicator of market timing. We do not recommend selling stocks because market valuations are high; however, we recommend exercising caution when adding new positions.

Bull/Bear Market

The Bull/Bear indicator remains at 40%, warning of a bear market ahead, with three of five indicators signaling risk-off.

US Bull-Bear Market Indicator

The S&P 500 has crossed below its 50-week moving average, but has yet to test primary support at 6550. Twiggs Smoothed Momentum (30-week) is also declining but has yet to cross below zero, which would signal risk-off.

S&P 500 with 50-Week WMA & 30-Week Twiggs Smoothed Momentum

Also, the Chicago Fed National Financial Conditions Index rose to -0.514 last week. Financial conditions are tightening, but still some way from the -0.40 that would signal risk-off.

Chicago Fed National Financial Conditions Index

Stock Pricing

Stock pricing eased to 94.60 percent from 98.64 percent last week. The steep change is primarily due to a break in the series. We have replaced the Price-to-Sales ratio and Forward Price-Earnings Ratio for the S&P 500 with similar series for the Dow Jones Industrial Index. However, there is one notable difference: we use a 20% trimmed mean, which excludes the top 10% and bottom 10% of readings for individual stocks, to minimize distortion from outliers in the smaller index population of 30 stocks. The reading remains extreme, warning of a significant drawdown in stocks.

US Stock Market Value Indicator

We use z-scores to measure each indicator’s current position relative to its historical data, with results expressed in standard deviations from the mean. We then calculate an average of the five readings and convert that to a percentile. The higher the stock market price measure is relative to the historical mean, the greater the risk of a sharp drawdown.

The Forward Price-to-Earnings Ratio for the Dow Jones Industrial Average (with a 20% trimmed mean) at 21.87 remains the highest over the past 7 years.

Dow Jones Industrial 30 Trimmed Mean of Forward PE

The Forward Price-to-Sales Ratio for the Dow Jones Industrial 30 (with 20% trimmed mean) remains below its 2021 and 2022 readings of 3.96 and 3.99, respectively.

Dow Jones Industrial 30 Trimmed Mean of Price-to-Sales

Conclusion

The bull-bear indicator at 40% warns of a bear market ahead, while extreme price levels indicate an elevated risk of a significant drawdown.

Acknowledgments

Notes

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ASX Market Snapshot

Bull-Bear Market Indicator
Stock Market Pricing Indicator

The gauge on the left indicates whether the market is in a bull or bear phase, while the one on the right reflects the current valuation of the stock market. Stock market pricing indicates whether stocks are cheap or expensive in relation to earnings, but it is a poor indicator of market timing. We do not recommend selling stocks when market valuations are high, but we advise caution when adding new positions.

Bull/Bear Market

The ASX Bull-Bear Market indicator remains at 56%, from 66% seven weeks ago. One of four Australian indicators and one of two Chinese indicators signal risk-off. When combined with the US Bull/Bear indicator, which has a 40% weighting, the composite indicator signals a mild bear market.

ASX Bull-Bear Market Indicator

NAB forward orders maintained their uptrend, rising to +6 in February. The 3-month moving average increased to 2.33; values above zero signal risk-on.

NAB Forward Orders

China, however, is slowing. The NBS Manufacturing PMI slipped to 49.0 in February; a further decline would add another risk-off signal.

China: NBS Manufacturing PMI

Stock Pricing

ASX stock pricing eased to 85.01 percent, from 86.04 percent last week, as the market retreated. The August 2025 high was 92.23 percent, with an April low of 67.85 percent.

ASX Stock Market Value Indicator

We use z-scores to measure each indicator’s current position relative to its historical data, with results expressed in standard deviations from the mean. We then calculate an average of the five readings and convert that to a percentile. The higher stock market prices are relative to their historical mean, the greater the risk of a sharp drawdown.

Conclusion

The ASX bull-bear indicator at 56% signals a mild bear market, while stock market pricing remains extreme, suggesting an elevated risk of a drawdown.

Acknowledgments

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The Escalation Trap | Prof. Robert Pape

“We don’t have a strategy to win.”

Air power expert, Professor Robert Pape (University of Chicago), says air power campaigns don’t effect regime change.

He warns of the “smart bomb illusion,” where precision targeting gives the illusion of control over escalation. We are distracted by the success of precision air strikes, but they cause escalation, and we don’t see the long war coming.

Acknowledgement

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US Market Snapshot

Bull/Bear Market Indicator
Stock Market Pricing Indicator

The gauge on the left indicates whether the market is in a bull or bear phase, and the indicator on the right reflects the current valuation of the stock market. Stock market pricing indicates whether stocks are cheap or expensive in relation to earnings, but it is a poor indicator of market timing. We do not recommend selling stocks because market valuations are high; however, we recommend exercising caution when adding new positions.

Bull/Bear Market

The Bull/Bear indicator remains at 40%, warning of a bear market ahead, with three of five indicators signaling risk-off.

US Bull-Bear Market Indicator

Heavy truck sales declined to 26,000 units in February. The 12-month average of 33,600 has fallen more than 10%, signaling risk-off.

Heavy Truck Sales

Employment in cyclical sectors declined by 260,000. The combined payroll for Manufacturing, Construction, Transportation & Warehousing fell to 27.41 million in February from 27.67 million in September 2024. A decline of 300,000 would signal risk-off.

Cyclical Sector Employment

Stock Pricing

Stock pricing eased slightly to 98.64 percent, from the high of 98.87 percent two weeks ago, well above the April 2025 low of 95.04 percent. The extreme pricing warns that stocks are at risk of a significant drawdown.

US Stock Market Value Indicator

We use z-scores to measure each indicator’s current position relative to its historical data, with results expressed in standard deviations from the mean. We then calculate an average of the five readings and convert that to a percentile. The higher the stock market price measure is relative to the historical mean, the greater the risk of a sharp drawdown.

Robert Shiller’s CAPE ratio for the S&P 500 declined to 38.2 times the 10-year average of inflation-adjusted earnings, as stock prices eased.

S&P 500 CAPE Ratio

Conclusion

The bull-bear indicator at 40% warns of a bear market ahead, while extreme price levels indicate the elevated risk of a significant drawdown.

Acknowledgments

Notes

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ASX Market Snapshot

Bull-Bear Market Indicator
Stock Market Pricing Indicator

The gauge on the left indicates whether the market is in a bull or bear phase, while the one on the right reflects the current valuation of the stock market. Stock market pricing indicates whether stocks are cheap or expensive in relation to earnings, but it is a poor indicator of market timing. We do not recommend selling stocks when market valuations are high, but we advise caution when adding new positions.

Bull/Bear Market

The ASX Bull-Bear Market indicator remains at 56%, from 66% six weeks ago. One of four Australian indicators and one of two Chinese indicators signal risk-off. When combined with the US Bull/Bear indicator, which has a 40% weighting, the composite indicator signals a mild bear market.

ASX Bull-Bear Market Indicator

The OECD Composite Leading Indicator for China slipped further, to 98.54. Below 99.0 signals risk-off.

OECD Composite Leading Indicator

China’s NBS Manufacturing PMI is also slipping, falling to 49.0 in February. A decline below 49.0 would reinforce the OECD risk-off signal.

China: NBS Manufacturing PMI

Stock Pricing

ASX stock pricing declined to 86.04 percent with the market pull-back, from 88.61 percent last week. The August high was 92.23 percent, and the April low was 67.85 percent.

ASX Stock Market Value Indicator

We use z-scores to measure each indicator’s current position relative to its historical data, with results expressed in standard deviations from the mean. We then calculate an average of the five readings and convert that to a percentile. The higher stock market prices are relative to their historical mean, the greater the risk of a sharp drawdown.

ASX stock market capitalization rose to 1.2 times nominal GDP in February, suggesting elevated valuations.

ASX Market Capitalization to GDP

Conclusion

The ASX bull-bear indicator at 56% signals a mild bear market, while stock market pricing remains extreme, indicating an elevated risk of a drawdown.

Acknowledgments

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Australia Braces for Oil Shortages

Key Points

  • Australia has roughly one month of emergency reserves of petrol, diesel, and gasoline.
  • Iranian attacks will likely lead to supply shortages and steep price hikes in food, commodities, and air travel.

Brent crude futures (May ’26) are testing resistance at $85 per barrel. A breakout will likely offer a short-term target of $90.

Brent Crude

March 5 (Reuters) – More tankers came under attack in Gulf waters on Thursday as the U.S.–Iran war escalated, and Iranian drones entered ​Azerbaijan, threatening to spread the crisis to more oil producers in the region.

A Bahamas-flagged crude oil tanker was targeted by an Iranian ‌remote-controlled boat laden with explosives while anchored near Iraq’s Khor al Zubair port, according to initial assessments. A second tanker at anchor off Kuwait was taking on water and spilling oil after a large explosion on its port side.

Nine vessels have come under attack since the conflict broke out between the U.S., Israel and Iran on Saturday. Iran ​launched a wave of missiles at Israel early on Thursday and also sent drones into Azerbaijan, injuring four people.

….Around 200 ships, including oil and liquefied natural ​gas tankers as well as cargo ships, remained at anchor in open waters off the coast of major Gulf producers, according to Reuters estimates based ​on ship-tracking data from the MarineTraffic platform.

Hundreds of other vessels remained outside the Strait of Hormuz unable to reach ports, shipping data showed.

Australian ​Energy Minister Chris Bowen said on Tuesday that Australia has 36 days of petrol, 34 days of diesel, and 32 days of jet fuel in reserve. While Bowen stressed this was the highest level in more than a decade, it’s far below the International Energy Agency recommendation of 90 days.

Compare that to Japan, which is similarly reliant on crude oil from the Middle East and holds emergency oil reserves equivalent to 254 days of consumption. (Reuters)

Ongoing shortages caused by even partial closure of the Strait of Hormuz could lead to fuel rationing in Australia.

Major industries that are heavily reliant on diesel fuel include long-haul road transport, agriculture, and mining. Iron ore operations in the Pilbara region, a major earner of export revenue, alone consume hundreds of millions of liters of diesel each year. (Reuters)

The aviation industry is also vulnerable to fuel shortages. Jet fuel prices in Asia’s ​trading hub Singapore climbed to $225.44 a barrel on Wednesday, a record high.

The spot price of jet kerosene has now gained 140% since the close of $93.45 a barrel on February 27, the day before the United States and Israel launched an aerial bombing campaign against Iran.

The problem is that much of the oil shipped through the Strait of Hormuz is medium-sour crude, a grade prized for its higher yield of middle distillates such as jet kerosene and diesel.

Even if refiners can source alternative crudes from Africa or South America, these grades tend to be lighter and yield more light distillates such as gasoline and naphtha. (Reuters)

The Dow Jones Global Oil & Gas Index has climbed 20% since mid-January.

Dow Jones Global Oil & Gas Index

Conclusion

Japan and China have large emergency stockpiles of crude and LNG and can probably survive several months of supply interruptions.

India, Australia, and Europe do not have that luxury and will likely suffer from a steep spike in prices and possible fuel rationing if the Strait of Hormuz remains closed.

In Australia, we expect food prices to jump if the price of diesel, used in agriculture and long-haul freight, rises. Mining costs will also likely rise due to diesel shortages, driving up the cost of materials.

Global aviation is also vulnerable because of the steep rise in jet fuel prices.

Acknowledgments

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Iran: What Comes Next?

Key Points

  • Combined air strikes on Iran by the US and Israel make good media coverage but are unlikely to lead to regime change.
  • An Iranian strategy that prolongs the conflict while increasing the cost to the US and its allies has the potential to frustrate US ambitions.
  • Rising crude oil prices and increased US deficits will likely fuel a sharp increase in inflation.

President Trump succeeded in diverting media attention from his troubles at home, with attention-grabbing headlines about Operation “Epic Fury” in Iran. But does he have a clear end goal? He claims the Iranians have requested talks, but they deny it. So what happens if the Iranians are unwilling to give Trump his media victory?

Predictions of a “short war” typically underestimate the opponent and the unpredictability of war.

Many things in war are unpredictable, but some are self-evident:

  • Israel does not have the manpower to wage a full-scale war against Iran.
  • The US public does not have the stomach for a large war, and US leaders want to avoid putting “boots on the ground” at all costs.
  • US allies in the Middle East are equipped with modern air defense systems that can protect them from most missile and drone attacks, but they don’t have the stockpiles of weapons to endure a sustained barrage over several months.
  • Oil tankers carry 21 million barrels of crude oil through the Strait of Hormuz every day. Four ships have already been damaged. Closing the Straits would halt the flow of 20% of global oil production, causing a massive supply shortage and spike in oil prices.

Crude Oil Flows Through the Strait of Hormuz

Brent crude prices shot to above $80 per barrel on Monday.

Brent Crude

Robin Brooks compares the current price rise to Russia’s invasion of Ukraine in 2022:

Today’s post …. benchmarks the current shock versus Russia’s invasion of Ukraine four years ago. Russia is a massive oil producer and – at the time – markets worried it would get shut out of the global economy. Yesterday’s spike in oil prices was more than three times as big as the rise on Feb. 24, 2022, the day Russia invaded Ukraine. That’s a big shock no matter how you cut it.

Iranian officials say they have closed the Strait of Hormuz. US Central Command says that is not the case. But tanker rates and insurance costs have skyrocketed.

Lloyds List highlights the steep rise in very large crude carrier (VLCC) rates:

BALTIC Exchange indexes for very large crude carriers loading in the Middle East Gulf reached record highs on Monday. Iranian attacks on tankers and insurers’ withdrawal of war risk cover have effectively closed the Strait of Hormuz.

Spot rate strength in the MEG has cascaded through global freight prices, leading to a surge in rates for VLCCs and other tanker segments worldwide.

The Baltic Exchange’s MEG-China TD3C index went parabolic after the outbreak of war, coming in at a record $423,736 per day on Monday, up 94% from Friday.

Crude Oil Tanker Rates

Global Impact

China gets about 45% of its crude oil needs from the Middle East, with 11% from Iran.

Global Oil Trade

  • Russia, as a large oil exporter, would benefit from a spike in crude oil prices. So would Canada and African exporters like Angola.
  • Large oil importers — China, India, Japan, the rest of the Asia-Pacific region, and Europe — would all suffer from a steep rise in crude oil prices.
  • The US is a net oil importer. While less affected than other major importers, the US has experienced steep rises in inflation during past spikes in crude oil prices.

The 1973 Yom Kippur War and the Arab oil embargo caused a massive jump in crude oil prices, with CPI reaching 12.0% (red- RHS). The Iran-Iraq war in 1980 caused an even steeper spike in inflation, with CPI at nearly 15%.

WTI Crude & CPI

During the 1990 Gulf War, CPI rose above 6.0%. However, during the 2003 Iraq War, deflationary forces— from the collapse of the Dotcom bubble and China’s entry into the WTO — helped offset inflationary pressures from higher crude oil prices.

WTI Crude & CPI

Crude oil prices had already spiked in 2021, but Russia’s full-scale invasion of Ukraine in February 2022 lifted annual CPI to 9.0%.

WTI Crude & CPI

US Deficits

The US federal debt is at a precarious 122% of GDP, and budget deficits remain stubbornly high. The US does not have much spare capacity to wage an extensive or protracted war without generating high inflation.

Federal Debt to Nominal GDP (%)

Conclusion

China’s dependence on crude oil imports is its Achilles heel. The country imports 11 million barrels of crude oil per day, and much of that flows through the Strait of Hormuz.

Chinese leaders will be watching the US-Iran conflict with alarm. US control of the Strait of Hormuz would have China at its mercy. China’s blue-water navy is decades away from being able to challenge US naval supremacy in the Indian Ocean. The only effective way for them to intervene in the current conflict would be to supply Iran with advanced weapons that can challenge US naval dominance.

The Iranians have been battered by air strikes before. They know that a full-scale US invasion is unlikely, and that nothing short of that will likely remove them from power. Their best strategy is patience. They can afford to wait the Americans out. Increase the cost of the war and frustrate US efforts to achieve a decisive outcome. Another protracted conflict in the Middle East, with sky-high oil prices causing a steep rise in inflation, will soon sour US public opinion and lead to yet another retreat.

A protracted conflict in the Middle East would also increase US fiscal deficits. Inflation will likely rise, fueled by increased government spending and rising crude oil prices. Higher inflation and further increases in government debt would increase term premia on long-dated Treasuries. High long-term interest rates would raise the cost of servicing government debt and further increase the deficit.

Attempts by the Fed to suppress long-term interest rates, through QE or other means, would further fuel inflation.

Our strategy is to remain heavily overweight in gold and defensive stocks with stable income streams, and underweight long-term financial assets and high-multiple growth stocks.

Acknowledgments

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US Market Snapshot

Bull/Bear Market Indicator
Stock Market Pricing Indicator

The gauge on the left indicates whether the market is in a bull or bear phase, and the indicator on the right reflects the current valuation of the stock market. Stock market pricing indicates whether stocks are cheap or expensive in relation to earnings, but it is a poor indicator of market timing. We do not recommend selling stocks because market valuations are high; however, we recommend exercising caution when adding new positions.

Bull/Bear Market

The Bull/Bear indicator remains at 40%, warning of a bear market ahead, with three of five indicators signaling risk-off.

US Bull-Bear Market Indicator

The S&P 500 uptrend has slowed, but the 30-week Twiggs Momentum (Smoothed) remains above zero, signaling risk-on.

S&P 500 Twiggs Momentum 30-week Smoothed

Stock Pricing

We have excluded the Forward PE valuation for the S&P 500 because S&P Dow Jones no longer provides forward earnings estimates.

Our average stock pricing score eased slightly to 98.84 percent, from last week’s high of 98.87 percent, well above the April 2025 low of 95.04 percent. The extreme pricing warns that stocks are at risk of a significant drawdown.

US Stock Market Value Indicator

We use z-scores to measure each indicator’s current position relative to its historical data, with results expressed in standard deviations from the mean. We then calculate an average of the five readings and convert that to a percentile. The higher the stock market price measure is relative to the historical mean, the greater the risk of a sharp drawdown.

Robert Shiller’s CAPE ratio for the S&P 500 eased slightly to 39.55 times the last 10 years of inflation-adjusted earnings. Apart from the Dotcom bubble in 1999-2000, these are the highest readings ever recorded.

S&P 500 CAPE Ratio

Conclusion

The bull-bear indicator at 40% warns of a bear market ahead, while extreme price levels indicate an elevated risk of a significant drawdown.

Acknowledgments

Notes

Posted on

ASX Market Snapshot

Bull-Bear Market Indicator
Stock Market Pricing Indicator

The gauge on the left indicates whether the market is in a bull or bear phase, while the one on the right reflects the current valuation of the stock market. Stock market pricing indicates whether stocks are cheap or expensive in relation to earnings, but it is a poor indicator of market timing. We do not recommend selling stocks when market valuations are high, but we advise caution when adding new positions.

Bull/Bear Market

The ASX Bull-Bear Market indicator remains at 56%, from 66% five weeks ago. One of four Australian indicators and one of two Chinese indicators signal risk-off. When combined with the US Bull/Bear indicator, which has a 40% weighting, the composite indicator signals a mild bear market.

ASX Bull-Bear Market Indicator

The ASX 200 Index continues its long-term decline relative to Gold (in Australian Dollars), indicating risk-off.

ASX 200 Index/Gold in AUD

Stock Pricing

ASX stock pricing increased to 88.61 percent from 87.41 percent last week, closer to the August high of 92.23 percent than the April low of 67.85 percent.

ASX Stock Market Value Indicator

We use z-scores to measure each indicator’s current position relative to its historical data, with results expressed in standard deviations from the mean. We then calculate an average of the five readings and convert that to a percentile. The higher stock market prices are relative to their historical mean, the greater the risk of a sharp drawdown.

The trimmed mean Forward PE ratio for the ASX 20 reached a new high of 20.87.

ASX 20 Trimmed Mean of Forward PE

Conclusion

The ASX bull-bear indicator at 56% signals a mild bear market, while stock market pricing remains extreme, indicating an elevated risk of a drawdown.

Acknowledgments

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