*                         12/18    12/25    1/1      1/8/24
S&P 500 Index             4719.19  4754.63  4769.83  4697.24
Trailing 12 month PE      24.56    24.65    24.61    24.34
Trail Earnings yield      4.07%    4.06%    4.06%    4.11%
Forward 12 month PE       21.60    21.69    21.68    21.62
Fwd Earnings Yield        4.63%    4.61%    4.61%    4.63%
90 day tbill yield        5.44     5.44     5.40     5.47
10 year tbond yield       3.91%    3.90%    3.88%    4.05%
Arezi Ratio               1.34     1.34     1.33     1.33
Fed Ratio                 0.84     0.85     0.84     0.88

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 53%
stocks, 47% 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 inverted. - Bearish

A composite allocation may start with the Arezi formula and subtract 10%
for each bearish indicator. The current target allocation is 33%.

An alternative allocation, using S=120-30*Arezi Ratio and the first
two of the other timing indicators, produces a target of 80%.

Elan

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