*                         12/25    1/1      1/8      1/15/24
S&P 500 Index             4754.63  4769.83  4697.24  4783.83
Trailing 12 month PE      24.65    24.61    24.34    24.92
Trail Earnings yield      4.06%    4.06%    4.11%    4.01%
Forward 12 month PE       21.69    21.68    21.62    22.05
Fwd Earnings Yield        4.61%    4.61%    4.63%    4.54%
90 day tbill yield        5.44     5.40     5.47     5.45
10 year tbond yield       3.90%    3.88%    4.05%    3.96%
Arezi Ratio               1.34     1.33     1.33     1.36
Fed Ratio                 0.85     0.84     0.88     0.87

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 52%
stocks, 48% 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 inverted. - Bearish

A composite allocation may start with the Arezi formula and subtract 10%
for each bearish indicator. The current target allocation is 32%.

An alternative allocation, using S=120-30*Arezi Ratio and the first
two of the other timing indicators, produces a target of 79%.

Elan

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