{"id":62991,"date":"2025-11-01T03:59:04","date_gmt":"2025-11-01T03:59:04","guid":{"rendered":"https:\/\/thepatientinvestor.com\/?p=62991"},"modified":"2025-11-01T03:59:04","modified_gmt":"2025-11-01T03:59:04","slug":"asx-leading-indicators-6","status":"publish","type":"post","link":"https:\/\/thepatientinvestor.com\/index.php\/2025\/11\/01\/asx-leading-indicators-6\/","title":{"rendered":"ASX 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 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%, down from 66% three 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

China’s NBS Manufacturing PMI fell sharply from 49.8 in September to 49.0 in October. A PMI below 49.0 signals risk-off.<\/p>\n

\"NBS<\/p>\n

September Australian building approvals will be released on Monday, where the 3-month moving average was close to a risk-off signal in August.<\/p>\n

\"Australian<\/p>\n

Stock Pricing<\/h2>\n

ASX stock pricing declined to 88.70 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