*                         10/12    10/19    10/26    11/2/26
S&P 500 Index             7811.54  7659.44  7623.68  7580.07
Trailing 12 month PE      26.50    26.42    26.15    25.86
Trail Earnings yield      3.77%    3.79%    3.82%    3.87%
Forward 12 month PE       19.17    18.94    18.65    18.29
Fwd Earnings Yield        5.22%    5.28%    5.36%    5.47%
90 day tbill yield        4.25     4.26     4.22     4.16
10 year tbond yield       5.24%    5.09%    5.00%    4.94%
Arezi Ratio               1.13     1.12     1.10     1.08
Fed Ratio                 1.00     0.96     0.93     0.90

The Arezi Ratio is the 90 day tbill yield divided by the trailing
earnings yield of the S&P500. A low ratio means that stocks are undervalued.

The 'Fed Ratio' is the 10 year treasury bond yield divided by the
forward estimated operating earnings yield of the S&P500. A low ratio
means that stocks are undervalued. Thus, a ratio of 0.71 for example
means, according to Yardeni, that stocks are cheaper than 'fair value'
by 29%.

The 'S=120-50*Arezi Ratio' formula indicates an allocation of 66%
stocks, 34% cash this week.

Other timing indicators:
The S&P index is above its 200DMA. - Bullish
We are in the Nov-Apr part of the year. - Bullish
The trailing PE ratio of the S&P is above 17. - Bearish
The treasury yield curve is normal. - Bullish

A composite allocation may start with the Arezi formula and subtract 10%
for each bearish indicator. The current target allocation is 56%.

An alternative allocation, using S=120-30*Arezi Ratio and the first
two of the other timing indicators, produces a target of 88%.

Elan