{"id":62119,"date":"2025-07-12T06:55:44","date_gmt":"2025-07-12T06:55:44","guid":{"rendered":"https:\/\/thepatientinvestor.com\/?p=62119"},"modified":"2025-07-12T06:55:44","modified_gmt":"2025-07-12T06:55:44","slug":"asx-market-leading-indicators-8","status":"publish","type":"post","link":"https:\/\/thepatientinvestor.com\/index.php\/2025\/07\/12\/asx-market-leading-indicators-8\/","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 one on the right reflects stock market drawdown risk.<\/p>\n

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

The ASX Bull-Bear Market indicator remains at 54%, after declining from 64% two weeks ago. Three of six indicators from Australia and China signal risk-off, with a combined weighting of 60% in the ASX Bull-Bear Index, while the US Bull-Bear Index makes up the remaining 40%.<\/p>\n

\"ASX<\/p>\n

NAB forward orders increased to zero in June, but the 3-month moving average remains negative at -1.67.<\/p>\n

\"Australia:<\/p>\n

China’s OECD composite leading index eased to 100.26 for June, but remains well above our 99.0 risk-off level.<\/p>\n

\"China:<\/p>\n

Stock Pricing<\/h2>\n

ASX stock pricing increased to a new high of 87.0 percent, from a low of 67.85 percent in April, now in the extreme 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.<\/p>\n

The PE of highest trailing earnings compares the current value for the All Ordinaries Index to the highest preceding four consecutive quarters of earnings for the index, removing distortions from sharp earnings falls during recessions. The current multiple of 17.5 is the highest since the Dotcom era.<\/p>\n

\"All<\/p>\n

Conclusion<\/h2>\n

The ASX is now in a mild bear market, while the extreme valuation increases the risk of a significant drawdown.<\/p>\n

Acknowledgments<\/h4>\n