Tag: Australian Private Dwelling Approvals

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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 right reflects stock market drawdown risk.

Bull/Bear Market

The ASX Bull-Bear Market indicator remains at 54%, signaling a mild bear market.

Three of the six indicators from Australia and China (our largest trading partner) signal risk-off. 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 ASX 200 Financials index ($XFJ) threatens to break out above 9260 on the weekly chart. A higher close would signal a new uptrend, reversing the bear signal from March 7, 2025.

ASX 200 Financials

Also, China’s NBS manufacturing PMI improved to 49.5 in May. A decrease below 49 would have triggered a recession signal.

China: NBS Manufacturing PMI

However, Australian private dwelling approvals are weakening. The 3-month moving average at 15.2K is close to reversing below its red signal line (15.1K), which would trigger a recession signal.

Australian Private Dwelling Approvals

Stock Pricing

ASX stock pricing increased to 80.75 percent, from a low of 67.85 seven weeks ago, approaching the high of 85.83 in February 2025. The reading above 80 percent signals that stock pricing is back 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.

Conclusion

The ASX signals a mild bear market, but the risk of a significant drawdown is now extreme.

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 is unchanged at 54%, signaling a mild bear market.

Three of six indicators from Australia and China (our largest trading partner) signal risk-off. 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 ASX 200 Financials index ($XFJ) threatens to break out above 9320 on the weekly chart, which would signal a new uptrend. The indicator would switch to risk-on, reversing its bear signal from March 7, 2025.

ASX 200 Financials

However, China’s NBS manufacturing PMI fell sharply to 49.0 in April. Any further decrease would trigger a recession signal.

China: NBS Manufacturing PMI

Australian private dwelling approvals are also weakening. A reversal of the 3-month MA below the red signal line would also signal risk-off.

Australian Private Dwelling Approvals

Stock Pricing

ASX stock pricing eased slightly, to 79.65 percent, a sizable gain from 67.85 six weeks ago, but well below the high of 85.83 in February 2025.

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 bear market, while the risk of a significant drawdown remains high.

Acknowledgments

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ASX Weekly Market 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 remains at 54%, signaling a mild bear market.

Indicators from Australia and China (our largest trading partner) were unchanged, with three of the six signaling risk-off. These have a 60% weighting with the US bull-bear indicator making up the other 40%.

Bull-Bear Market Indicator

Private dwelling approvals declined to a seasonally adjusted 14.9 thousand in March. However, the 3-month moving average above the 20-year moving average continues to signal risk-on.

Australia: Private Dwelling Approvals

Stock Pricing

ASX stock pricing increased to 78.41 percent, compared to 67.85 four weeks ago and a high of 85.83 in February.

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 bull-bear indicator signals a mild bear market, while the risk of a significant drawdown remains high.

Australian private dwelling approvals are weakening, and China’s NBS manufacturing PMI is a hair’s breadth away from a recession warning; so the bull-bear indicator is on negative watch1.

Acknowledgments

Notes

  1. When a credit-rating agency places a company on negative watch, it indicates an increased likelihood of downgrading its credit rating in the near future.
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