*                         9/22     9/29     10/6     10/13/25
S&P 500 Index             6664.36  6643.70  6715.79  6552.51
Trailing 12 month PE      28.85    28.66    28.89    28.14
Trail Earnings yield      3.47%    3.49%    3.46%    3.55%
Forward 12 month PE       24.88    24.70    24.90    24.24
Fwd Earnings Yield        4.02%    4.05%    4.02%    4.13%
90 day tbill yield        4.03     4.02     4.03     4.02
10 year tbond yield       4.14%    4.20%    4.13%    4.05%
Arezi Ratio               1.16     1.15     1.16     1.13
Fed Ratio                 1.03     1.04     1.03     0.98

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 63%
stocks, 37% 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 43%.

An alternative allocation, using S=120-30*Arezi Ratio and the first
two of the other timing indicators, produces a target of 76%.

Elan

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