*                         2/9      2/16     2/23     3/2/26
S&P 500 Index             6932.30  6836.17  6909.51  6878.88
Trailing 12 month PE      27.80    27.11    27.30    27.07   
Trail Earnings yield      3.60%    3.69%    3.66%    3.69%
Forward 12 month PE       23.42    22.95    23.14    22.97
Fwd Earnings Yield        4.27%    4.36%    4.32%    4.35%
90 day tbill yield        3.68     3.68     3.69     3.67
10 year tbond yield       4.22%    4.04%    4.08%    3.97%
Arezi Ratio               1.02     1.00     1.01     0.99
Fed Ratio                 0.99     0.93     0.94     0.91

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 70%
stocks, 30% 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 normal. - Bullish

A composite allocation may start with the Arezi formula and subtract 10%
for each bearish indicator. The current target allocation is 60%.

An alternative allocation, using S=120-30*Arezi Ratio and the first
two of the other timing indicators, produces a target of 90%.

Elan

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