Tag: ASX Stock Market Value Indicator

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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% three 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 Financials Index respected support at 9000 and remains in a primary uptrend, indicating risk-on.

ASX 200 Financials Index

The OECD China Leading Composite Index declined to 98.8, the second month below the risk-off threshold of 99.0.

OECD: China Leading Composite Index

Stock Pricing

ASX stock pricing increased to 84.90 percent from 82.80 percent last week, compared to the August high of 92.23 percent and 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 ratio of ASX Stock Market Capitalisation to GDP increased to 1.19, which is 15.5% above the long-term average of 1.03.

ASX Stock Market Capitalisation/GDP

Conclusion

The ASX bull-bear indicator at 56% indicates a mild bear market, with signs that the Chinese economy is slowing. Stock market pricing remains extreme, indicating an elevated risk of a drawdown.

Acknowledgments

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% two weeks ago, indicating a mild bear market. One of four Australian indicators signals risk-off, while one of two Chinese indicators does the same. 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 declined to -1 in December 2025, but the 3-month moving average remains above zero, indicating risk-on.

NAB Forward Orders Index

China’s NBS Manufacturing PMI slowed sharply to 49.3 from 50.1 in December, signaling a contraction. The NBS reading was well below the expected 50 but still above the risk-off threshold of 49.0.

China's NBS Manufacturing PMI

The latest reading signaled a loss of momentum in factory activity at the start of the year, as subdued demand conditions and cautious business sentiment continued to weigh amid ongoing structural headwinds. New orders slipped back into contraction (49.2 vs 50.8 in December), alongside a slowdown in output growth (50.6 vs 51.7). Foreign sales weakened further (47.8 vs 49.0), employment remained soft (48.1 vs 48.2), and purchasing activity declined sharply (48.7 vs 51.1). (National Bureau of Statistics of China)

Stock Pricing

ASX stock pricing increased to 82.80 percent from 82.40 percent last week, still roughly mid-range between the August high of 92.23 percent and 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.

Conclusion

The ASX bull-bear indicator at 56% indicates a mild bear market, with signs that the Chinese economy is slowing. Stock market pricing remains extreme, indicating an elevated risk of a drawdown.

Acknowledgments

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% two weeks ago, indicating a mild bear market. One of four Australian indicators signals risk-off, while one of two Chinese indicators does the same. 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 Financials Index continues to test support at 9000 after breaking below its 50-week moving average. A breach of support would signal reversal to a downtrend, indicating risk-off.

ASX 200 Financials Index (XFJ)

Stock Pricing

ASX stock pricing eased to 82.40 percent from 83.24 percent last week, still roughly mid-range between the August high of 92.23 percent and 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.

Conclusion

The ASX bull-bear indicator at 56% indicates a mild bear market, with signs that the Chinese economy is slowing. Stock market pricing remains extreme, indicating an elevated risk of a drawdown.

Acknowledgments

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 fell to 56%, from 66% last week, indicating a mild bear market. Three of four Australian indicators signal a risk-on stance, while one of our two Chinese indicators has fallen to a risk-off signal. When combined with the US Bull/Bear indicator, which has a 40% weighting, the composite indicator has eased to 56%, signaling a mild bear market.

ASX Bull-Bear Market Indicator

The OECD Composite Leading Indicator for China declined to 98.96, below the 99.0 threshold, signaling risk-off.

OECD Composite Leading Indicator for China

Stock Pricing

ASX stock pricing jumped to 83.24 percent from 80.82 percent last week, still roughly mid-range between the August high of 92.23 percent and 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 All Ordinaries Dividend Yield is at a low 3.17% compared to its 45-year average of 4.09%, indicating that stocks are highly-priced.

All Ordinaries Dividend Yield

Conclusion

The ASX bull-bear indicator declined to 56%, signaling a mild bear market on signs that the Chinese economy is slowing. Stock market pricing remains extreme, indicating increased risk of a significant drawdown.

Acknowledgments

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 66%, up from 56% eight weeks ago. Three of four indicators from Australia and two from China indicate a risk-on stance, with a combined 60% weighting, while the US Bull/Bear indicator, which accounts for the other 40%, remains bearish.

ASX Bull-Bear Market Indicator

The ASX 200 Financials Index (XFJ) crossed below its 50-week moving average to test support at 9000. A breach of support would indicate reversal to a primary downtrend, signaling risk-off.

ASX 200 Financials Index (XFJ)

Australian private dwelling approvals jumped in November, with the 3-month moving average climbing to 16.7K. Values above the 20-year MA signal risk-on.

Australia: Housing Approvals

Stock Pricing

ASX stock pricing increased to 80.82 percent from 80.57 percent last week, roughly midway between the August high of 92.23 percent and 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 All Ordinaries Price-Earnings ratio of 18.0, based on highest trailing earnings, is at the 93rd percentile and close to the extremes above 20.0 in 1987 and 2000.

All Ordinaries PE of Highest Trailing Earnings

Conclusion

The ASX bull-bear indicator indicates a mild bull market, with most leading indicators above the risk-off threshold. Stock market pricing has softened but remains extreme and does not constitute a buy signal.

Acknowledgments

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 66%, up from 56% eight weeks ago. Three of four indicators from Australia and two from China indicate a risk-on stance, with a combined 60% weighting, while the US Bull/Bear indicator, which accounts for the other 40%, remains bearish.

ASX Bull-Bear Market Indicator

The ASX 200 relative to gold (in Australian Dollars) is the only bear signal, having started a downtrend in November 2021.

ASX 200/Gold (AUD) Ratio

China’s NBS Manufacturing PMI jumped to 50.1 for December, exceeding expectations of 49.2. The first positive reading since March, values above 50 indicate expansion.

China: NBS Manufacturing PMI

Stock Pricing

ASX stock pricing declined to 80.57 percent from 81.05 percent last week, roughly midway between the August high of 92.23 percent and 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.

Conclusion

The ASX bull-bear indicator indicates a mild bull market, with most leading indicators above the risk-off threshold. Stock market pricing has softened, but does not represent a buy signal.

Acknowledgments

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 66%, up from 56% six weeks ago. Three of four indicators from Australia and two from China indicate a risk-on stance, with a combined 60% weighting, while the US Bull/Bear indicator, which accounts for the remaining 40%, is more bearish.

ASX Bull-Bear Market Indicator

The only Australian bear signal is the ASX 200 decline relative to gold (in Australian Dollars), which started four years ago.

ASX 200/Gold in AUD

Stock Pricing

ASX stock pricing declined to 79.44 percent from 80.70 percent last week, compared to the August high of 92.23 percent and 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 is in a mild bull market. Most leading indicators are declining but remain above the risk-off threshold. Valuation has retreated from the August high, but does not yet signal a buy opportunity.

Acknowledgments

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 because market valuation is high, but advise caution when adding new positions.

Bull/Bear Market

The ASX Bull-Bear Market indicator remains at 66%, up from 56% three weeks ago. Three of four indicators from Australia and two for China indicate a risk-on stance, with a combined 60% weighting, while the US Bull/Bear indicator, which makes up the balance, is only 40% risk-on.

ASX Bull-Bear Market Indicator

The November update for China NBS Manufacturing PMI is due for release tomorrow at 9:30. A decline below the October level of 49.0 would signal risk-off.

China: NBS Manufacturing PMI

The ASX 200 Financials index (XFJ) continues to test support at 9000, while the Trend Index has crossed below zero, indicating rising selling pressure. A breach of 9000 would offer a target of primary support at 8000.

ASX 200 Financials Index

Stock Pricing

ASX stock pricing increased to 83.02 percent, well below the August high of 92.23 percent, but remains extreme compared to 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 that stock market pricing is relative to its historical mean, the greater the risk of a sharp drawdown.

Conclusion

The ASX bull-bear indicator indicates a mild bull market, but that could change if the Chinese NBS Manufacturing PMI falls tomorrow. Valuation is declining after reaching a new extreme, and the risk of a significant drawdown remains high.

Acknowledgments

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ASX Retreats

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 because market valuation is high, but advise caution when adding new positions.

Bull/Bear Market

The ASX Bull-Bear Market indicator remains at 66%, up from 56% two weeks ago. Three of four indicators from Australia and two for China indicate a risk-on stance, with a combined 60% weighting, while the US Bull/Bear indicator, which makes up the balance, is only 40% risk-on.

ASX Bull-Bear Market Indicator

The ASX 200 Financials index (XFJ) crossed below its 50-week moving average, signaling a correction, but remains in a primary uptrend.

ASX 200 Financials Index

Stock Pricing

ASX stock pricing declined to 82.69 percent, compared to a high of 92.23 percent in August, and 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 of 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 bull-bear indicator has improved to a mild bull market. Valuation is declining after reaching a new extreme, and the risk of a significant drawdown remains high.

Acknowledgments

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ASX Improves to Mild Bull Market

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 because market valuation is high, but advise caution when adding new positions.

Bull/Bear Market

The ASX Bull-Bear Market indicator improved to 66%, from 56% over the last four weeks. Three of four indicators from Australia and two for China now indicate a risk-on stance, with a combined 60% weighting, while the US Bull/Bear indicator, with a 40% weighting, is 60% risk-off.

ASX Bull-Bear Market Indicator

NAB forward orders jumped to +3 in October, raising the 3-month moving average above the zero signal line to signal risk-on.

NAB Forward Orders

The improvement in forward orders was led by a jump in the mining sector.

NAB Forward Orders - by Industry

Stock Pricing

ASX stock pricing declined to 84.01 percent, from a high of 92.23 percent in August, compared to 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 of 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.

ASX market capitalization increased to 1.2 times GDP, the highest since 2021.

ASX Market Cap/GDP

Earlier peaks are attributable to the resources sector, with ASX market cap almost doubling during the boom from 2004 to 2007. Both earlier peaks were followed by a steep rise in iron ore prices (marked in red below).

Iron Ore Booms

But this time is different. Iron ore prices are falling.

Conclusion

The ASX bull-bear indicator has improved to a mild bull market, but valuation is falling after reaching a new extreme, and the risk of a significant drawdown is high.

Acknowledgments

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