*                         9/1      9/8      9/15     9/22/25
S&P 500 Index             6460.26  6481.50  6584.29  6664.36
Trailing 12 month PE      27.90    28.24    28.60    28.85
Trail Earnings yield      3.58%    3.54%    3.50%    3.47%
Forward 12 month PE       24.35    24.33    24.65    24.88
Fwd Earnings Yield        4.11%    4.11%    4.06%    4.02%
90 day tbill yield        4.23     4.07     4.08     4.03
10 year tbond yield       4.23%    4.10%    4.06%    4.14%
Arezi Ratio               1.18     1.15     1.17     1.16
Fed Ratio                 1.03     1.00     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 62%
stocks, 38% 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 normal. - Bullish

A composite allocation may start with the Arezi formula and subtract 10%
for each bearish indicator. The current target allocation is 42%.

An alternative allocation, using S=120-30*Arezi Ratio and the first
two of the other timing indicators, produces a target of 75%.

Elan

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