Tag: Australian Private Housing Approvals

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ASX Market Snapshot

Bull-Bear Market Leading Index
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 Leading Index is at 54, down from 64 two weeks ago, signaling a bear market. Two of four Australian indicators signal risk-off after the 3-month moving average of NAB Forward Orders fell to -2 for May 2026. One of two Chinese indicators signals risk-off, and the ASX 200 Financials Index is testing primary support, placing us on bear watch. ASX Bull/Bear Market Indicator Australian leading indicators carry a 40% weighting in the ASX Leading Index, China 20%, and the US Leading Index carries the remaining 40%.

Financial Sector

The ASX 200 Financials Index (XFJ) is below its 50-week weighted moving average and continues to test primary support at 9000. A breach of 9000, confirmed by a follow-through below 8900, would signal a primary downtrend and indicate risk-off. ASX 200 Financials Index

Housing Approvals

Activity in the Australian housing sector is improving, with the 3-month moving average of private housing approvals rising to 17.4K in April. A cross of 3-month MA values (navy) to below the 20-year MA (red) would signal risk-off. Australian Private Housing Approvals

Stock Pricing

ASX stock pricing recovered to 76.88 from 75.52 percent last week. Our highest reading was 92.23 percent in August 2025, with a low of 67.85 percent in April 2025.

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 Bull-Bear indicator suggests that the Australian economy is slowing. Two Australian indicators — NAB Forward Orders and the ASX 200 Financial Index — are close to the threshold but do not yet signal risk-off. However, they keep us on bear alert.

Meanwhile, valuations remain high, increasing the risk of a drawdown.

Acknowledgments

Managing Risk

To find out more, go to Managing Risk on the top menu, or see:

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ASX Leading Indicator and Stock Pricing

Bull-Bear Market Indicator
Stock Market Pricing Indicator

The gauge on the left indicates bull or bear market status, while the indicator on the right reflects stock market valuation. Stock market pricing indicates whether stocks are cheap or expensive relative to earnings, but it is a poor indicator of market timing. We do not recommend selling stocks because the market valuation is high. Still, we advise investors to be circumspect about adding new positions without carefully investigating the underlying value.

Bull/Bear Market

The ASX Bull-Bear Market indicator remains at 66%, compared to 56% five weeks ago, signaling a mild bull market.

ASX Bull-Bear Market Indicator

Five indicators from Australia and China indicate risk-on, while the ASX 200 relative to Gold (in AUD) remains risk-off. The composite index includes a 40% weighting for the US Bull/Bear indicator, which is also unchanged.

Australian private dwelling approvals declined to 14.1K in August, but the 3-month moving average remains at 15.3K. A cross below the 20-year moving average (15.1K) would signal risk-off.

Australian Private Dwelling Approvals

China’s NBS manufacturing PMI improved to 49.8 points for September. The last reading below the 49.0 risk-off signal line was in May 2023.

China: NBS Manufacturing PMI

Stock Pricing

ASX stock pricing increased to 90.10 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 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 bull market. However, the extreme valuation increases the long-term risk of a significant drawdown.

Acknowledgments

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