*                         10/20    10/27    11/3     11/10/25
S&P 500 Index             6664.01  6791.69  6840.20  6728.80
Trailing 12 month PE      28.59    29.07    29.22    27.97
Trail Earnings yield      3.50%    3.44%    3.42%    3.58%
Forward 12 month PE       24.54    24.92    25.02    24.37
Fwd Earnings Yield        4.08%    4.01%    4.00%    4.10%
90 day tbill yield        4.00     3.93     3.89     3.92
10 year tbond yield       4.02%    4.02%    4.11%    4.11%
Arezi Ratio               1.14     1.14     1.14     1.10
Fed Ratio                 0.99     1.00     1.03     1.00

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 65%
stocks, 35% 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 55%.

An alternative allocation, using S=120-30*Arezi Ratio and the first
two of the other timing indicators, produces a target of 87%.

Elan

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