A Cautious Outlook

As stated last week, market weakness early in the week caused my technical indicators to go negative where they remain.  This means that my model has reduced its stock market exposure back to 25%.  Both sentiment and valuation indicators are improving slowly but are still neutral at best.  Earnings continue to show weakness and the market could get much more ugly if earnings problems continue.
 
Earnings:
This year's earnings estimate trend - Positive
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 +50%

Sentiment:
Equity put/call ratio +65%
Small investor put/call ratio +50%
NAAIM Manager cash position +5%
Average sentiment exposure this week +40%

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 +40%

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 +20%
Rounded to the nearest 25th percentile +25%