The gauge on the left indicates bull or bear market status, while the one on the right reflects stock market drawdown risk.
Bull/Bear Market
The ASX Bull-Bear Market indicator remains at 64%, reflecting a mild bull market. Four of six indicators from Australia and China signal risk-on, with a combined weighting of 60% in the ASX Bull-Bear Index. The US Bull-Bear Index makes up the remaining 40%.
The ASX 200 Financials Index (XFJ) is consolidating in bull market territory, above support at 9250.
However, the ASX 200 (XJO) continues to decline against its gold benchmark in Australian Dollars.
Stock Pricing
ASX stock pricing eased slightly to 86.04 percent, from last week’s high of 86.23, and a low of 67.85 eleven weeks ago. Stock pricing remains extreme.
Conclusion
The ASX signals a mild bull market, but extreme valuations increase the risk of a significant drawdown.
Acknowledgments
- NAB Monthly Business Survey: April 2025
- ABS: Private Dwelling Approvals
- Trading Economics: China Business Indicators
- Morningstar: ASX 20 Statistics
- S&P Global Indices: All Ordinaries Statistics
- Market Index: ASX Statistics
- ABS: National Accounts
- ASX: Historical Market Statistics
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.