*                         12/23    12/30    1/6      1/13/25
S&P 500 Index             5930.85  5970.84  5942.47  5827.04
Trailing 12 month PE      28.46    28.64    28.40    27.72
Trail Earnings yield      3.51%    3.49%    3.52%    3.61%
Forward 12 month PE       23.78    23.95    23.78    23.17
Fwd Earnings Yield        4.20%    4.17%    4.20%    4.32%
90 day tbill yield        4.34     4.31     4.34     4.36
10 year tbond yield       4.52%    4.62%    4.60%    4.77%
Arezi Ratio               1.23     1.23     1.23     1.21
Fed Ratio                 1.07     1.11     1.09     1.11

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 60%
stocks, 40% 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 50%.

An alternative allocation, using S=120-30*Arezi Ratio and the first
two of the other timing indicators, produces a target of 84%.

Elan

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