*                         7/7      7/14     7/21     7/28/25
S&P 500 Index             6279.35  6259.75  6296.79  6388.64
Trailing 12 month PE      28.46    28.27    27.95    28.25
Trail Earnings yield      3.51%    3.54%    3.58%    3.54%
Forward 12 month PE       24.47    24.33    24.08    24.28
Fwd Earnings Yield        4.09%    4.11%    4.15%    4.12%
90 day tbill yield        4.42     4.47     4.40     4.42
10 year tbond yield       4.35%    4.43%    4.44%    4.40%
Arezi Ratio               1.26     1.26     1.23     1.25
Fed Ratio                 1.06     1.08     1.07     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 58%
stocks, 42% 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 28%.

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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