{"id":62954,"date":"2025-10-25T04:30:28","date_gmt":"2025-10-25T04:30:28","guid":{"rendered":"https:\/\/thepatientinvestor.com\/?p=62954"},"modified":"2025-10-25T04:30:28","modified_gmt":"2025-10-25T04:30:28","slug":"asx-extreme-pricing-continues","status":"publish","type":"post","link":"https:\/\/thepatientinvestor.com\/index.php\/2025\/10\/25\/asx-extreme-pricing-continues\/","title":{"rendered":"ASX extreme pricing continues"},"content":{"rendered":"
\n
\"Bull-Bear<\/div>\n
\"Stock<\/div>\n<\/div>\n

The gauge on the left indicates bull or bear market status, while the indicator on the right reflects stock market valuation. Stock market pricing indicates whether stocks are cheap or expensive relative to earnings, but it is a poor indicator of market timing<\/strong>. We do not recommend selling stocks because the market valuation is high. Still, we advise investors to be circumspect about adding new positions without carefully investigating the underlying value.<\/p>\n

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

The ASX Bull-Bear Market indicator remains at 56%, from 66% two weeks ago. Four indicators from Australia and China indicate risk-on, with a 60% weighting, while the US Bull\/Bear indicator has a 40% weighting.<\/p>\n

\"ASX<\/p>\n

The ASX 200 index has been in a downtrend relative to gold (measured in AUD) for four years, and shows no sign of changing.<\/p>\n

\"ASX<\/p>\n

Stock Pricing<\/h2>\n

ASX stock pricing increased to 90.09 percent, compared to a high of 92.23 percent in August and a low of 67.85 percent in April.<\/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

Conclusion<\/h2>\n

The ASX bull-bear indicator reflects a mild bear market, while extreme valuation increases the long-term risk of a significant drawdown.<\/p>\n

Acknowledgments<\/h4>\n