*                         5/26     6/2      6/9      6/16/25
S&P 500 Index             5802.82  5911.69  6000.36  5976.97
Trailing 12 month PE      26.31    26.77    27.30    27.22
Trail Earnings yield      3.80%    3.74%    3.66%    3.67%
Forward 12 month PE       23.01    23.37    23.63    23.48
Fwd Earnings Yield        4.35%    4.28%    4.23%    4.26%
90 day tbill yield        4.36     4.36     4.43     4.45
10 year tbond yield       4.51%    4.41%    4.51%    4.41%
Arezi Ratio               1.15     1.17     1.21     1.21
Fed Ratio                 1.04     1.03     1.07     1.04

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 above its 200DMA. - Bullish
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 29%.

An alternative allocation, using S=120-30*Arezi Ratio and the first
two of the other timing indicators, produces a target of 74%.

Elan

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