*                         12/22    12/29    1/5      1/12/26
S&P 500 Index             6834.50  6929.94  6858.47  6966.28
Trailing 12 month PE      28.45    28.78    28.46    28.81
Trail Earnings yield      3.51%    3.47%    3.51%    3.47%
Forward 12 month PE       24.07    24.32    23.91    24.19
Fwd Earnings Yield        4.16%    4.11%    4.18%    4.13%
90 day tbill yield        3.62     3.64     3.65     3.62
10 year tbond yield       4.16%    4.14%    4.19%    4.18%
Arezi Ratio               1.03     1.05     1.04     1.04
Fed Ratio                 1.00     1.01     1.00     1.01

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 68%
stocks, 32% 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 58%.

An alternative allocation, using S=120-30*Arezi Ratio and the first
two of the other timing indicators, produces a target of 89%.

Elan

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