If anything, things look worse for two reasons.  First, earnings estimates for 2013 are trending slightly down now.  Looking twelve months ahead, earnings are still trending up because analysts are backloading the supposed good news.  Second, as the market went down last week, small investors and speculators actually got more bullish and stepped up their buying.  That is a very negative development.  Still holding at 25% exposure, though, because technical factors are still positive.

 If I had to guess, I think the rally of the last four weeks will be reversed soon and very quickly.  But that would just be an educated guess - my model still calls for some exposure based on the strong momentum:
 
Earnings:

Earnings results continue to be flat to down as they are reported.  The gap between last twelve
month results and future twelve month expectations is still more than 28% and it  continues to grow.
This indicator continues to suggest 0% exposure this week.
Twelve month forward earnings are still trending higher as analysts obviously think things will improve during the first quarter of 2014.  
This indicator is still positive at this point with 100% exposure.
2013 estimates are my third indicator and they are now showing a basically flat trend as analysts have stopped raising their estimates for 2013.    
This indicator is now neutral and calls for 50% exposure, down from 100% last week. 
Total exposure from  the earnings factor is 50%, down from 67% last week.

Sentiment: 
I have decided to change one of my sentiment indicators this week.  Rydex Fund investors have become less and less useful as index ETFs have become more popular.  Therefore, the indicator has lost much of its timliness.  Instead, I am going to use odd lot short sales compared to odd lot purchases.  As it turns out, this indicator is just as bearish as the Rydex Fund indicator was.  Odd lot investors have cut back their shorting substantially.
Exposure from this indicator starts at -10%, same as last week for my Rydex Fund indicator.
Small option buyers continued to move to a more bullish position.  They remain at a neutral sentiment level.
Exposure stays at 50%,  same as last week.
NAAIM managers continued to move to a more bullish stance but still not at extreme levels.
Exposure remains at 5% this week, same as last week.
When one of my sentiment indicators is maximum bearish and the other two are neutral or negative, I assign a sentiment factor of 0%, same as last week.

Valuation:
Percentage of stock prices represented by net current assets remained the same last week so
exposure continues at 20%, same as last week.
Comparison of stock earnings yield to ten year treasury yield declined again last week.
Exposure declines to 20%, down from 30% last
week.
Total valuation exposure is 20%, down from 25% last week.

To combine these three factors, I multiply them together and then take the cube  root.  This 
week, that number remains at 0%, same as last week.
  
Technicals:
My comparison of yields on treasury bonds compared to lower quality corporates remained positive last week.  I add 10% to account for this factor.
New highs - new lows on the Nasdaq are still positive.  I add 20% to account for this factor.
Total technical adjustments this week are +30%, same as last week.

After adjustments, total exposure for the week is 30% or, after rounding, 25% compared to 25% last
week.

I will be traveling for the next couple of weeks so I probably won't be able to post extensive analysis.  I will try to post a short note if there are any significant changes in the outlook.

We are reaching the point now where there is no one left to turn bullish.  The momentum is clearly strong but my model says it is time to back away and watch for some type of correction.

Earnings:
Earnings results continue to be flat to down as they are reported.  The gap between last twelve
month results and future twelve month expectations is now more than 27% and it  continues to grow.
This indicator continues to suggest 0% exposure this week.
Twelve month forward earnings are still trending higher as analysts obviously think things will improve as the year goes along and during the first quarter of 2014.  
This indicator is still positive at this point with 100% exposure.
2013 estimates are my third indicator and they showed a slight increase last week.  However, the uptrend is coming into question and it wouldn't take much to turn this indicator to neutral or negative. 
For now, though, this indicator continues to call for 100% exposure.
Total exposure from  the earnings factor is 67%, same as last week.

Sentiment:
Rydex leveraged fund investors got still more bullish last week.
Exposure from this indicator remains at -10%, same as last week.
Small option buyers continued to move to a more bullish position.  They are now at a neutral sentiment level. 
Exposure declines to 50%,  down from 65% last week.
NAAIM managers continued to move to a more bullish stance but not yet at extreme levels.
Exposure remains at 5% this week, same as last week.
When one of my sentiment indicators is maximum bearish and the other two are neutral or negative, I assign a sentiment factor of 0%, down from 20% last week. 

Valuation:
Percentage of stock prices represented by net current assets remained the same last week so
exposure continues at 20%, same as last week.
Comparison of stock earnings yield to ten year treasury yield declined last week.
Exposure declines to 30%, down from 50% last week.
Total valuation exposure is 25%, down from 35% last week.

To combine these three factors, I multiply them together and then take the cube root.  This 
week, that number is 0%, down from 36% last week.
 
Technicals:
My comparison of yields on treasury bonds compared to lower quality corporates remained positive last week.  I add 10% to account for this factor.
New highs - new lows on the Nasdaq are still positive.
I add 20% to account for this factor.
Total technical adjustments this week are +30%, same as last week.

After adjustments, total exposure for the week is 30% or, after rounding, 25% compared to 75% last
week.

 

 Euphoria reins as the market continues to make new highs.  As forecast last week, pessimism on the part of options buyers particularly set the stage for additional gains.  They got more optimistic last week but not enough to disrupt the uptrend unless earnings show further deterioration.

Earnings:
Earnings results continue to be flat to down as they are reported.  The gap between last twelve
month results and future twelve month expectations is now more than 28% and it continues to grow.
This indicator continues to suggest 0% exposure this week.
Twelve month forward earnings are still trending higher as analysts obviously think things will improve as the year goes along and during the first quarter of 2014.  
This indicator is still positive at this point with 100% exposure.
2013 estimates are my third indicator and they showed another decline last week.  The uptrend is coming into question and it wouldn't take much to turn this indicator to neutral or negative. 
For now, though, this indicator continues to call for 100% exposure.
Total exposure from  the earnings factor is 67%, same as last week.

Sentiment:
Rydex leveraged fund investors remained very bullish last week.
Exposure from this indicator remains at -10%, same as last week.
Small option buyers reversed their pessimism to some extent.  They are by no means bullish, though. 
Exposure declines to 65%,  down from 80% last week.
NAAIM managers flipped back to a more bullish stance.
Exposure declines to 5% this week, down from 20% last week.
Average sentiment factor exposure this week is 20%, down from 30% last week.

Valuation:
Percentage of stock prices represented by net current assets remained the same last week so
exposure continues at 20%, same as last week.
Comparison of stock earnings yield to ten year treasury yield remained the same last week.
Exposure remains at 50%, same as last week.
Total valuation exposure is 35%, same as last week.

To combine these three factors, I multiply them together and then take the cube root.  This  
week, that number is 36%, down from 41% last week.

Technicals:
My comparison of yields on treasury bonds compared to lower quality corporates remained positive last week.  I add 10% to account for this factor.
New highs - new lows on the Nasdaq are still positive.
I add 20% to account for this factor.
Total technical adjustments this week are +30%, same as last week.

After adjustments, total exposure for the week is 66% or, after rounding, 75% compared to 75% last
week.