Still Very Cautious

A big Friday the 13th  rally wiped out the losses from the first four days of the week, except for the  average stock, as measured by the Value Line Geometric Average.  It was down and  contributed to
further divergence problems.  My indicators got a little more bearish:

Earnings:
My data provider changed its earnings estimate source last week and that caused some minor changes in the current earnings trend.  There is still a downtrend and that downtrend is accelerating. 
However,  this provider's estimates are just slightly better than previous. Nevertheless,  I am not changing my appraisal of the earnings factor.  Exposure = 0%, same  as last week and shorting the market is a possibility.

Sentiment  Factors:
Investors in the Rydex Funds continued to hold extremely bullish  positions. They are growing still bolder and seem willing to buy into a very  bullish outlook.  I really don't like it. 
Exposure = -10%, maximum bearish  position.
NAAIM investors got a little bit more bullish last week. Exposure =  35%, down from 50% last week.
Small option buyers stayed fairly bullish.    Exposure = 50%, same as last week.
Total sentiment factor exposure =  25%, down from 30% last week.
 
Valuation:
Percentage of value represented by net current assets stayed the same last week.
Exposure = 60%, same as last week.
Comparison of bond yields to stock earnings  yields remained the same last week.
Exposure = 50%, same as last week. 
Total valuation factor exposure = 55%, same as last week.

When earnings are trending down, I average the sentiment exposure and the valuation exposure and 
then subtract 100%.  So (25% + 55%)/2 -100% = -60% (or 60% short).  This is down  from -57.5% exposure last week.
 
Technicals:
I subtract 10% because the ratio of high yield bonds to treasuries is in a downward trend.
This week I add 10% because NH-NL  remains positive.
Total technical adjustments are 0%  and exposure = (60%), down from (57.5%) last week.

Two week moving average is -59%, down from -57.5% last week.  However, my model does not short when NH-NL is positive or neutral so exposure this week is 0%.  I remain out of the market (on the long side) until the earnings outlook  improves. 

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