Tag: China NBS Manufacturing PMI

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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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