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*                         7/21     7/28     8/4      8/11/25
S&P 500 Index             6296.79  6388.64  6238.01  6389.45
Trailing 12 month PE      27.95    28.25    27.47    28.04
Trail Earnings yield      3.58%    3.54%    3.64%    3.57%
Forward 12 month PE       24.08    24.28    23.62    24.12
Fwd Earnings Yield        4.15%    4.12%    4.23%    4.15%
90 day tbill yield        4.40     4.42     4.35     4.32
10 year tbond yield       4.44%    4.40%    4.23%    4.27%
Arezi Ratio               1.23     1.25     1.19     1.21
Fed Ratio                 1.07     1.07     1.00     1.03

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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