The Rally - Too Far Too Fast

A sharp turkey week rally aleviated the short term oversold nature of the market but the trend still looks  down to me: 
 
Earnings:
The divergence between last twelve month earnings and projected earnings for the next 52 weeks just grows and  grows. This is negative and results in a continuing zero exposure from this  indicator. 
Twelve month forward earnings are still  nudging higher and are  positive with 100% exposure.
My hybrid method that looks at this year's  estimates and weights in 2013 in the second half is also positive and calls for  100% exposure.
Total exposure from the earnings factor is 67%,  same as last week. 
 
Sentiment:
Although finally showing some improvement, Rydex investors are still overweighted in stocks.  Exposure from this indicator  remains at -10%.
Small option buyers wanted to play the rally last week as they got more bullish.  Not enough to change the exposure, though, which remains at 65%, same as last week.
NAAIM managers also turned more bullish.  Exposure is 20% this week, down from 35% last week.
Total sentiment factor exposure is 25% this week, down from 30% last week.

Valuation:
Percentage of stock prices represented by net current assets stayed the same last week so exposure remains at 40%.
Comparison of stock earnings yield to ten year treasury yield decisively reversed last week as the market advanced and yields  went up.  Exposure is 50% this week, down from 80% last 
week.
Total valuation exposure is 45%, down from 60%  last week. 
 
To combine these three factors, I multiply them  together and then take the cube root.  Therefore, these three factors call for a  market exposure of 42%, down from 49% last week.

Technicals:
My comparison of yields on treasury bonds compared to lower quality corporates turned negative last week.  It goes from a  zero impact to a negative 10%.
New highs - new lows on the Nasdaq improved but remains negative.  I subtract 10% to account for this.
Total technical adjustments this week are -20%  and were -10% last week.

After adjustments, total exposure for the week  is 22%, down from 39% last week.

I've decided to simply use the weekly exposure  figures rather than a two week average so we are at 22% this week compared to  46% last week.
 

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