Momentum Still Working

  Once again the momentum of the market carried it higher last week.  The only timing strategy that has worked so far this year has just been to buy on any dip.  With complacency very high, the correction could be very painful when it comes but seems like the market has a bit farther to run.

Earnings:
Estimates for both 2013 and 2014 are now in clear downtrends but the fact that I am shifting
weight from this year to next is allowing my first earnings indicator to remain positive.
Looking at earnings 52 weeks ahead, estimates are still in an upward trend as optimistic analysts stay very positive.  The trend is slowing, however.
With both earnings indicators positive, my maximum earnings exposure is 100%.
Looking at the gap between last twelve month earnings and future 52 week projections, the gap is very large and is now growing again.
I subtract 25% to account for this growing gap.
Total earnings factor exposure and maximum total exposure is therefore 75%, same as last week.

Sentiment: 
Odd lot investors remain in a neutral position.
Exposure remains at 50%, same as last week.
Small option buyers remained very bullish last week but my indicator just barely edged out of extreme territory. 
Exposure increases to 5%,  up from -10% last week.
NAAIM managers became still more bullish last week and they have also come within a tiny measure of being in extreme territory.
Exposure declines to 5% this week, down from 20% last week.
Average sentiment factor exposure is 20% this week, up from 0% last week. 
 
Valuation:
Percentage of stock prices represented by net current assets remains at the lowest level possible.
Exposure remains at 0%, same as last week.
Comparison of stock earnings yield to ten year treasury yield remained neutral last week.
Exposure remains at 50%, same as last week.
Total valuation exposure is 25%, same as last week.

To combine
these three factors, I multiply them together and then take the cube root.
This week, that number is 33%, up from 0% 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.
My trend indicator for new highs - new lows on the Nasdaq remained positive last week so there is no reduction in exposure based on this indicator.
Total technical adjustments this week are +30%, same as last week.

After adjustments, total exposure for the week is 63% or, after rounding, 75%.
This level of exposure does not exceed the current earnings cap and is up from 25% last week.

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