Saved By Putin

The market reacted very favorably last week to the prospect of a deal with Russia and Syria.  A further extension of this move is likely but I don't think we have heard the last of Syrian problems:

Earnings:
Estimates for 2013/2014 continued a modest improvement and remain in a positive trend.
Looking at earnings 52 weeks ahead, estimates are still in an upward trend as optimistic
analysts stay very positive.
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, while the gap
is larger than I would like to see, it is still slowly declining.
There is no adjustment for the earnings gap so the earnings factor exposure is 100%, the same as last  
week.

Sentiment: 
Odd lot investors stopped their increased shorting activity. 
Exposure remains at 35%, same as last week.
Small option buyers continued to buy calls at a pretty high level, but not extreme.  
Exposure remains at 20%,  same as last week.
NAAIM managers put some more cash to work last week.
Exposure decreases to 50% this week, down from 65% last week.
The sentiment factor declines to 35% this week, down from 40% last week.


Valuation:
Percentage of stock prices represented by net current assets declined last week to the lowest level possible.
Exposure declines to 0%, down from 20% last week.
Comparison of stock earnings yield to ten year treasury yield remianed the same last week.
Exposure remians at 30%, same as last week.
Total valuation exposure is 15%, down from 25% last week.

To combine these three factors, I multiply them together and then take the cube root.
This week, that number is 37%, down from 46% 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 reversed last week and is now positive.  This indicator is only a cautionary one and does not add to the technical total when it is positive.
Total technical adjustments this week are +30%, up from +5% last week.

After adjustments, total exposure for the week is 67% or, after rounding, 75%.
This level of exposure does not exceed the current earnings cap and is up from 50% last week.

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