*                         8/4      8/11     8/18     8/25/25
S&P 500 Index             6238.01  6389.45  6449.80  6466.91
Trailing 12 month PE      27.47    28.04    27.98    27.98
Trail Earnings yield      3.64%    3.57%    3.57%    3.57%
Forward 12 month PE       23.62    24.12    24.49    24.49
Fwd Earnings Yield        4.23%    4.15%    4.08%    4.08%
90 day tbill yield        4.35     4.32     4.30     4.27
10 year tbond yield       4.23%    4.27%    4.33%    4.26%
Arezi Ratio               1.19     1.21     1.20     1.19
Fed Ratio                 1.00     1.03     1.06     1.04

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 60%
stocks, 40% 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 40%.

An alternative allocation, using S=120-30*Arezi Ratio and the first
two of the other timing indicators, produces a target of 74%.

Elan

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