*                         5/12     5/19     5/26     6/2/25
S&P 500 Index             5659.91  5958.38  5802.82  5911.69
Trailing 12 month PE      25.73    27.05    26.31    26.77
Trail Earnings yield      3.89%    3.70%    3.80%    3.74%
Forward 12 month PE       22.58    23.70    23.01    23.37
Fwd Earnings Yield        4.43%    4.22%    4.35%    4.28%
90 day tbill yield        4.34     4.37     4.36     4.36
10 year tbond yield       4.37%    4.43%    4.51%    4.41%
Arezi Ratio               1.12     1.18     1.15     1.17
Fed Ratio                 0.99     1.05     1.04     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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