All About Earnings

Fourth quarter earnings are being reported and they definitely don't look good.  In addition, prospects for 2015 are generally being downgraded.  This has brought my earnings indicators into a just marginally positive position with a high likelihood of going negative as early as next week.  My model has gone to a zero exposure position and will most likely go to a net short position very soon.  Needless to say, this is not the time to be overly exposed to the equity market.  Things could get very ugly in a hurry if earnings prospects don't improve.

Earnings:
This year's earnings estimate trend - Neutral
Earnings estimates 52 weeks out - Negative
Gap between future 52 week estimate and latest 12 month results - Neutral
Total earnings exposure and maximum total exposure under these conditions +25%

Sentiment:
Equity put/call ratio +50%
Small investor put/call ratio +35%
NAAIM Manager cash position -10%
Average sentiment exposure this week +25%

Valuation:
Long term valuation 0%
Stock prices represented by net current assets +20%
Stock earnings yeild compared to ten year treasury yield +80%
Average valuation exposure this week +33%

Total exposure from above three factors +27%

Technical Adjustments:
Comparison of Treasury Bond yields compared to lower quality corporate bond yields (10%)
New highs minus new lows on the NASDAQ (10%)
Trend indicator for new highs minus new lows 0%
Total technical adjustments -20%

Total stock exposure for the week +7%
Rounded to the nearest 25th percentile 0%