*                         6/30     7/7      7/14     7/21/25
S&P 500 Index             6173.07  6279.35  6259.75  6296.79
Trailing 12 month PE      28.04    28.46    28.27    27.95
Trail Earnings yield      3.57%    3.51%    3.54%    3.58%
Forward 12 month PE       24.19    24.47    24.33    24.08
Fwd Earnings Yield        4.13%    4.09%    4.11%    4.15%
90 day tbill yield        4.39     4.42     4.47     4.40
10 year tbond yield       4.29%    4.35%    4.43%    4.44%
Arezi Ratio               1.23     1.26     1.26     1.23
Fed Ratio                 1.04     1.06     1.08     1.07

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 normal. - Bullish

A composite allocation may start with the Arezi formula and subtract 10%
for each bearish indicator. The current target allocation is 39%.

An alternative allocation, using S=120-30*Arezi Ratio and the first
two of the other timing indicators, produces a target of 73%.

Elan

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