There is no shortage of indicators in the stock market. And anyone who can find reliable leading indicators that give reasonable predictions of what the markets are going to do in the future will quickly get very rich.
Many people try—and fail. That does not mean there is necessarily anything wrong with the indicators themselves. Take this chart produced by Crestmont Research. It shows secular bull and bear markets and makes some general conclusions about them, such as “Secular bull market periods have always started when P/Es were below average, and secular bear markets have never ended when P/Es were above average.”
A misleading indicator is one from which an unreasonable, unwarranted or plain wrong inference is made. Often people make lousy inferences because the indicators themselves are misleading—there is no shortage of those either. But it is just as easy to make a lousy inference from a good indicator through faulty reasoning.
This is perhaps especially true with financial indicators when people are looking for some way to get rich. How? By hunting for regularities, finding some, and extrapolating them only to find that they no longer apply because of the “this time is different” effect.