{"id":61965,"date":"2025-06-14T04:59:35","date_gmt":"2025-06-14T04:59:35","guid":{"rendered":"https:\/\/thepatientinvestor.com\/?p=61965"},"modified":"2025-06-14T04:59:35","modified_gmt":"2025-06-14T04:59:35","slug":"asx-market-leading-indicators-4","status":"publish","type":"post","link":"https:\/\/thepatientinvestor.com\/index.php\/2025\/06\/14\/asx-market-leading-indicators-4\/","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 at 64% reflects a mild bull market.<\/p>\n

Four out of six indicators from Australia and China (our largest trading partner) signal risk-on. 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 OECD composite leading indicator for China improved to 100.4 in May, well above the 99 warning level for a contraction.<\/p>\n

\"OECD<\/p>\n

However, NAB forward orders continue to warn of a contracting Australian economy in May, although the pace of the decline has slowed.<\/p>\n

\"NAB<\/p>\n

Australian private dwelling approvals are also weak. The 3-month moving average for April, at 15.2K, is close to its red signal line, at 15.1K, which signals risk-off.<\/p>\n

\"Australian<\/p>\n

Stock Pricing<\/h2>\n

ASX stock pricing increased to 86.19 percent, exceeding the high of 85.83 in February 2025, from a low of 67.85 nine weeks ago. The reading warns that stock pricing is extreme.<\/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 bull market, but valuations are now extreme, increasing the risk of a significant drawdown.<\/p>\n

Acknowledgments<\/h4>\n