Tag: ASX Bull-Bear Market Indicator

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ASX Leading Indicators

Bull-Bear Market Indicator
Stock Market Pricing Indicator

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 is at 56%, down from 64% two weeks ago. The latest decline was due to a fall in the US Bull/Bear indicator, which has a 40% weighting in the ASX index.

ASX Bull-Bear Market Indicator

Two of six indicators from Australia and China signal risk-off: NAB Forward Orders and the ASX 200 relative to Gold (in AUD).

Forward orders are improving, but the 3-month moving average remains below zero, signaling risk-off.

NAB Forward Orders

The ASX 200/Gold crossed above its 50-week weighted moving average this week, but has not yet completed a higher trough followed by a new high, signaling a reversal.

ASX 200/Gold in AUD

Stock Pricing

ASX stock pricing increased to a new high of 92.23 percent from a low of 67.85 in April.

ASX Stock Market Value Indicator

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

Forward price-earnings (FPE) for the ASX 20, calculated using a 20% trimmed mean, climbed to a new high of 23.93.

ASX 20 Forward PE, 20% Trimmed Mean

Conclusion

The ASX bull-bear indicator warns of a bear market, while valuations are now extreme, increasing the risk of a significant drawdown.

Acknowledgments

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ASX Pricing climbs to a new extreme

Bull-Bear Market Indicator
Stock Market Pricing Indicator

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 fall in the US leading indicator dragged the ASX Bull-Bear Market indicator down to 56%, back into a bear market, from 64% last Friday. The decline is due to the US index’s 40% weighting in the ASX Bull/Bear indicator.

ASX Bull-Bear Market Indicator

Two of the remaining six indicators, from Australia and China, signal risk-off, with a combined weighting of 60% in the ASX Bull-Bear Index.

Australian private dwelling approvals jumped to 16.7K in June, lifting the 3-month moving average above its long-term signal line and reversing the risk-off signal from last month.

Australian Private Dwelling Approvals

However, China’s National Bureau of Statistics Manufacturing PMI retreated to a bearish 49.3 in July from 49.7 in June. A fall below 49.0 would signal risk-off.

China NBS Manufacturing PMI

Stock Pricing

ASX stock pricing climbed to a new high of 91.23 percent from a low of 67.85 in April.

ASX Stock Market Value Indicator

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

The All Ordinaries climbed to 18.0 times highest trailing earnings in July, a level only exceeded during the Dotcom bubble and the boom before October 1987.

All Ordinaries PE of Highest Trailing Earnings

Conclusion

The ASX is back in a bear market, while valuations climbed to a new extreme, increasing the risk of a significant drawdown.

Acknowledgments

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ASX Market Leading Indicators

Bull-Bear Market Indicator
Stock Market Pricing Indicator

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 reverted to 64%, from 54% two weeks ago. Two of six indicators from Australia and China signal risk-off, with a combined weighting of 60% in the ASX Bull-Bear Index, while the US Bull-Bear Index, with a 40% weighting, completes the balance.

ASX Bull-Bear Market Indicator

Australian private dwelling approvals jumped to 16.7K in June, lifting the 3-month moving average above its long-term signal line and reversing the risk-off signal from last month.

Australian Private Dwelling Approvals

However, China’s National Bureau of Statistics Manufacturing PMI was bearish, retreating to 49.3 in July from 49.7 in June. A fall below 49.0 would signal risk-off.

China NBS Manufacturing PMI

Stock Pricing

ASX stock pricing climbed to a new high of 89.17 percent, well above the low of 67.85 in April.

ASX Stock Market Value Indicator

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

The 20% trimmed mean of ASX 20 stocks’ price-to-sales ratio reached a new high of 4.71 since 2015.
ASX 20 Price-to-Sales Ratio (20% Trimmed Mean)

Forward price-earnings for the ASX 20, also calculated as a 20% trimmed mean to remove outliers, is at a new high since data collection started in 2019.

ASX 20 Forward Price-Earnings Ratio (20% Trimmed Mean)

Conclusion

The ASX bear market signal improved slightly, but valuations reached a new extreme, increasing the risk of a significant drawdown.

Acknowledgments

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ASX Market Leading Indicators

Bull-Bear Market Indicator
Stock Market Pricing Indicator

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 54%, after declining from 64% two weeks ago. Three of six indicators from Australia and China signal risk-off, with a combined weighting of 60% in the ASX Bull-Bear Index. The US Bull-Bear Index, with a 40% weighting, completes the balance.

ASX Bull-Bear Market Indicator

The ASX 200 Financials Index (XFJ) retreated below its breakout level at 9250, warning of a correction. However, the index remains in a primary uptrend, signaling risk-on.

ASX 200 Financials Index

Stock Pricing

ASX stock pricing slipped to 87.12 percent from its new high of 87.85 percent last week, but well above the low of 67.85 in April.

ASX Stock Market Value Indicator

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

Conclusion

The ASX is in a mild bear market, while the extreme valuation increases the risk of a significant drawdown.

Acknowledgments

Posted on

ASX Market Leading Indicators

Bull-Bear Market Indicator
Stock Market Pricing Indicator

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 54%, after declining from 64% two weeks ago. Three of six indicators from Australia and China signal risk-off, with a combined weighting of 60% in the ASX Bull-Bear Index, while the US Bull-Bear Index makes up the remaining 40%.

ASX Bull-Bear Market Indicator

The ASX 200 is in a strong uptrend but has lost nearly 60% relative to gold (in Australian Dollars) over the past ten years.

China: OECD Composite Leading Indicator

Stock Pricing

ASX stock pricing jumped sharply, reaching a new high of 87.85 percent, from a low of 67.85 percent in April.

ASX Stock Market Value Indicator

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

The 20% trimmed mean of forward PE ratios in the ASX 20 climbed to 23.33 times earnings. The 96.44th percentile warns that pricing is extreme.

ASX 20 20% Trimmed Mean of Forward PE

Conclusion

The ASX is now in a mild bear market, while the extreme valuation increases the risk of a significant drawdown.

Acknowledgments

Posted on

ASX Market Leading Indicators

Bull-Bear Market Indicator
Stock Market Pricing Indicator

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 54%, after declining from 64% two weeks ago. Three of six indicators from Australia and China signal risk-off, with a combined weighting of 60% in the ASX Bull-Bear Index, while the US Bull-Bear Index makes up the remaining 40%.

ASX Bull-Bear Market Indicator

NAB forward orders increased to zero in June, but the 3-month moving average remains negative at -1.67.

Australia: NAB Forward Orders

China’s OECD composite leading index eased to 100.26 for June, but remains well above our 99.0 risk-off level.

China: OECD Composite Leading Indicator

Stock Pricing

ASX stock pricing increased to a new high of 87.0 percent, from a low of 67.85 percent in April, now in the extreme range.

ASX Stock Market Value Indicator

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

The PE of highest trailing earnings compares the current value for the All Ordinaries Index to the highest preceding four consecutive quarters of earnings for the index, removing distortions from sharp earnings falls during recessions. The current multiple of 17.5 is the highest since the Dotcom era.

All Ordinaries: PE of Highest Trailing Earnings

Conclusion

The ASX is now in a mild bear market, while the extreme valuation increases the risk of a significant drawdown.

Acknowledgments

Posted on

ASX Market Leading Indicators

Bull-Bear Market Indicator
Stock Market Pricing Indicator

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 declined to 54%, from 64% last week, slipping toward a bear market. Three of six indicators from Australia and China signal risk-off, with a combined weighting of 60% in the ASX Bull-Bear Index, while the US Bull-Bear Index makes up the remaining 40%.

ASX Bull-Bear Market Indicator

The three-month moving average of private dwelling approvals in Australia crossed below its 20-year MA signal line, switching to risk-off.

Australian Private Dwelling Approvals

Stock Pricing

ASX stock pricing increased to a new high of 86.58 percent, from a low of 67.85 percent twelve weeks ago. Stock pricing is now considered extreme.

ASX Stock Market Value Indicator

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

Conclusion

The ASX is now in a mild bear market, while the extreme valuation increases the risk of a significant drawdown.

Acknowledgments

Posted on

ASX Market Leading Indicators

Bull-Bear Market Indicator
Stock Market Pricing Indicator

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%.

ASX Bull-Bear Market Indicator

The ASX 200 Financials Index (XFJ) is consolidating in bull market territory, above support at 9250.

ASX 200 Financial Index

However, the ASX 200 (XJO) continues to decline against its gold benchmark in Australian Dollars.

Ratio of ASX 200 to Gold in AUD

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.

ASX Stock Market Value Indicator

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

Conclusion

The ASX signals a mild bull market, but extreme valuations increase the risk of a significant drawdown.

Acknowledgments

Posted on

ASX Market Leading Indicators

Bull-Bear Market Indicator
Stock Market Pricing Indicator

The gauge on the left indicates bull or bear market status, while the right reflects stock market drawdown risk.

Bull/Bear Market

The ASX Bull-Bear Market indicator, at 64%, reflects 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%.

ASX Bull-Bear Market Indicator

The ASX 200 continues to decline against its benchmark of Gold in Australian Dollars.

Ratio of ASX 200 to Gold in AUD

Stock Pricing

ASX stock pricing increased to 86.23 percent, from a low of 67.85 ten weeks ago, warning that stock pricing is extreme.

ASX Stock Market Value Indicator

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

Conclusion

The ASX signals a mild bull market, but extreme valuations increase the risk of a significant drawdown.

Acknowledgments

Posted on

ASX Market Leading Indicators

Bull-Bear Market Indicator
Stock Market Pricing Indicator

The gauge on the left indicates bull or bear market status, while the right reflects stock market drawdown risk.

Bull/Bear Market

The ASX Bull-Bear Market indicator at 64% reflects a mild bull market.

Four out of six indicators from Australia and China (our largest trading partner) signal risk-on. These have a combined weighting of 60% in the ASX Bull-Bear Index. The US Bull-Bear Index, also unchanged, makes up the remaining 40%.

ASX Bull-Bear Market Indicator

The OECD composite leading indicator for China improved to 100.4 in May, well above the 99 warning level for a contraction.

OECD Composite Leading Indicator for China

However, NAB forward orders continue to warn of a contracting Australian economy in May, although the pace of the decline has slowed.

NAB Forward Orders

Australian private dwelling approvals are also weak. The 3-month moving average for April, at 15.2K, is close to its red signal line, at 15.1K, which signals risk-off.

Australian Private Dwelling Approvals

Stock Pricing

ASX stock pricing increased to 86.19 percent, exceeding the high of 85.83 in February 2025, from a low of 67.85 nine weeks ago. The reading warns that stock pricing is extreme.

ASX Stock Market Value Indicator

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

Conclusion

The ASX signals a mild bull market, but valuations are now extreme, increasing the risk of a significant drawdown.

Acknowledgments

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