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%.
NAB forward orders remain below zero, signaling a contraction.
The OECD composite leading indicator for China improved to 101.03 in April, but this may have been affected by pre-ordering, which boosted exports ahead of the imposition of tariffs.
China’s NBS manufacturing PMI fell sharply to 49.0 in April. Any further decrease would trigger another recession signal.
Stock Pricing
ASX stock pricing increased to 79.92 percent, a substantial gain from 67.85 five weeks ago, and approaching the high of 85.83 from February.
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
- NAB Monthly Business Survey: April 2025
- ABS: Private Dwelling Approvals
- Trading Economics: China Business Indicators
- Morningstar: ASX All Ords & ASX 20 Statistics
- Market Index: ASX Statistics
- ABS: National Accounts
- ASX: Historical Market Statistics
Notes
- When a credit-rating agency places a company on negative watch, it indicates an increased likelihood of downgrading the rating in the near future.
Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.
Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.