{"id":61932,"date":"2025-06-07T07:22:24","date_gmt":"2025-06-07T07:22:24","guid":{"rendered":"https:\/\/thepatientinvestor.com\/?p=61932"},"modified":"2025-06-14T04:44:36","modified_gmt":"2025-06-14T04:44:36","slug":"asx-market-leading-indicators-3","status":"publish","type":"post","link":"https:\/\/thepatientinvestor.com\/index.php\/2025\/06\/07\/asx-market-leading-indicators-3\/","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 increased from 54% to 64%, returning to a mild bull market.<\/p>\n

Four of six indicators from Australia and China (our largest trading partner) now signal risk-on. These have a combined weighting of 60% in the ASX Bull-Bear Index. The US Bull-Bear Index, unchanged, makes up the remaining 40%.<\/p>\n

\"ASX<\/p>\n

The ASX 200 Financials index ($XFJ) closed above 9260, signaling risk-on, and reversing the bear signal from March 7, 2025.<\/p>\n

\"ASX<\/p>\n

However, Australian private dwelling approvals remain weak. The 3-month moving average at 15.2K for April is close to its red signal line at 15.1K. A cross below would signal risk-off.<\/p>\n

\"Australian<\/p>\n

Stock Pricing<\/h2>\n

ASX stock pricing jumped to 85.73 percent, from a low of 67.85 eight weeks ago, approaching the high of 85.83 from February 2025. The reading warns that stock pricing is 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

 <\/p>\n

A 20% trimmed mean of forward PE for the ASX 20 reached a new high of 22.57.\"ASX<\/p>\n

Conclusion<\/h2>\n

The ASX signals a return to a mild bull market, but valuations are now extreme, increasing the risk of a significant drawdown.<\/p>\n

Acknowledgments<\/h4>\n