{"id":62079,"date":"2025-06-28T04:16:00","date_gmt":"2025-06-28T04:16:00","guid":{"rendered":"https:\/\/thepatientinvestor.com\/?p=62079"},"modified":"2025-06-28T04:21:47","modified_gmt":"2025-06-28T04:21:47","slug":"us-market-leading-indicators-6","status":"publish","type":"post","link":"https:\/\/thepatientinvestor.com\/index.php\/2025\/06\/28\/us-market-leading-indicators-6\/","title":{"rendered":"US 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 Bull\/Bear indicator remains at 60%, with two of five leading indicators signaling risk-off:<\/p>\n

\"Bull-Bear<\/p>\n

Weekly continued claims increased to 1.974 million on June 14, warning that the labor market is deteriorating. Unemployment was at 4.2% in May, but will likely rise in the next few months.<\/p>\n

\"Continued<\/p>\n

Stock Pricing<\/h2>\n

Stock pricing increased to 96.96, compared to a low of 95.04 ten weeks ago and a high of 97.79 percent in February. The extreme reading warns that stocks are at risk of a significant drawdown.<\/p>\n

\"Stock<\/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.<\/p>\n

Robert Shiller’s CAPE compares the S&P 500 index against a ten-year average of inflation-adjusted earnings. CAPE increased to 37.29, approaching its December 2021 high of 38.31, which was only previously surpassed during the Dotcom bubble of 1999-2000.<\/p>\n

\"Robert<\/p>\n

The previous high was 32.56, before the stock market crash of October 1929, shown on Shiller’s long-term chart below.<\/p>\n

\"Robert<\/p>\n

Conclusion<\/h2>\n

We are in the early stages of a bear market, with the bull-bear indicator at 60%. Extreme stock pricing increases the risk of a significant drawdown.<\/p>\n

Acknowledgments<\/h4>\n