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*                         10/2     10/9     10/16    10/23/23
S&P 500 Index             4288.05  4308.05  4327.78  4224.16
Trailing 12 month PE      22.91    22.90    22.81    21.93
Trail Earnings yield      4.36%    4.37%    4.38%    4.56%
Forward 12 month PE       19.70    19.81    19.36    18.96
Fwd Earnings Yield        5.08%    5.05%    5.16%    5.27%
90 day tbill yield        5.55     5.63     5.62     5.58
10 year tbond yield       4.59%    4.78%    4.63%    4.93%
Arezi Ratio               1.27     1.29     1.28     1.22
Fed Ratio                 0.90     0.95     0.90     0.93

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 59%
stocks, 41% cash this week.

Other timing indicators:
The S&P index is below its 200DMA. - Bearish
We are in the May-Oct part of the year. - Bearish
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 19%.

An alternative allocation, using S=120-30*Arezi Ratio and the first
two of the other timing indicators, produces a target of 63%.

Elan

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