Volatility Continues

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At some point a rally like last Friday's will be extended just on the basis that we have declined too far - too fast.  That could happen at any time but it would just be a temporary rally unless something more fundamental can change.  One of my earnings indicators remains solidly bearish and the other is still neutral but on the verge of going bearish also.  It is going to be very hard for a sustainable rally to occur if earnings expectations are declining.  This is especially true when valuation is only neutral as it is now.  Sentiment is the one bullish factor but it is not bullish enough to change stock exposure on its own.  My model remains negative and suggests avoidance of equities until conditions improve.  For the more adventurous, a 30% net short position continues for another week.