Being Patient

The rally I discussed last week occurred right on schedule and it may not be over yet.  While small investors and speculators moved just slightly to a less bearish position they are still extremely bearish and it will take more market strength to make them get bullish again.  In the meantime, my other indicators are moving in opposite directions.  Earnings expectations have improved enough to move that indicator from neutral to bullish-neutral.  The rally last week was enough to reduce my valuation indicator from bearish-neutral to outright bearish.  My model puts all of this together and gets a recommended exposure of 45% this week.  I'm being patient and waiting for more clear-cut guidance before taking either side of the bull vs. bear debate.