Nothing really changed during my trip as my model's recommended exposure stayed at -75%. It is hard to find anything positive to focus on. Earnings expectations are in a clear downtrend. Sentiment is too bullish and valuation is miserable. Technical factors, at least new highs - new lows on the Nasdaq, have stayed positive but are now on the verge of changing trend. It is certainly possible that the earnings problems will be temporary and the market will begin to look a little better but the risk/reward ratio right here looks very poor.
Earnings: This year's earnings estimate trend - Negative 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 0% Sentiment: Equity put/call ratio +50% Small investor put/call ratio +5% NAAIM Manager cash position -10% Average sentiment exposure this week +15% Valuation: Long term valuation 0% Stock prices represented by net current assets 0% Stock earnings yeild compared to ten year treasury yield +20% Average valuation exposure this week +7% Total exposure from above three factors -89% or 89% short. Technical Adjustments: Comparison of Treasury Bond yields compared to lower quality corporate bond yields (10%) New highs minus new lows on the NASDAQ +20% Trend indicator for new highs minus new lows 0% Total technical adjustments +10% Total stock exposure for the week -79% Rounded to the nearest 25th percentile -75% or 75% short.
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With my wife on Aruba
December 2019 Categories |