{"id":61877,"date":"2025-05-31T07:34:44","date_gmt":"2025-05-31T07:34:44","guid":{"rendered":"https:\/\/thepatientinvestor.com\/?p=61877"},"modified":"2025-05-31T07:34:44","modified_gmt":"2025-05-31T07:34:44","slug":"asx-market-leading-indicators-2","status":"publish","type":"post","link":"https:\/\/thepatientinvestor.com\/index.php\/2025\/05\/31\/asx-market-leading-indicators-2\/","title":{"rendered":"ASX Market Leading Indicators"},"content":{"rendered":"
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\"Bull-Bear<\/div>\n
\"Stock<\/div>\n<\/div>\n

The gauge on the left indicates bull or bear market status, while the right reflects stock market drawdown risk.<\/p>\n

Bull\/Bear Market<\/h2>\n

The ASX Bull-Bear Market indicator remains at 54%, signaling a mild bear market.<\/p>\n

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%.<\/p>\n

\"ASX<\/p>\n

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.<\/p>\n

\"ASX<\/p>\n

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

\"China:<\/p>\n

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.<\/p>\n

\"Australian<\/p>\n

Stock Pricing<\/h2>\n

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<\/em> range.<\/p>\n

\"ASX<\/p>\n

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.<\/div>\n

Conclusion<\/h2>\n

The ASX signals a mild bear market, but the risk of a significant drawdown is now extreme.<\/p>\n

Acknowledgments<\/h4>\n