*                         1/20     1/27     2/3      2/10/25
S&P 500 Index             5996.66  6101.24  6040.53  6025.99
Trailing 12 month PE      28.45    28.61    28.15    28.22
Trail Earnings yield      3.51%    3.50%    3.55%    3.54%
Forward 12 month PE       23.78    24.06    23.79    23.77
Fwd Earnings Yield        4.21%    4.16%    4.20%    4.21%
90 day tbill yield        4.34     4.35     4.31     4.35
10 year tbond yield       4.61%    4.63%    4.58%    4.49%
Arezi Ratio               1.23     1.24     1.21     1.23
Fed Ratio                 1.10     1.11     1.09     1.07

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 59%
stocks, 41% 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 49%.

An alternative allocation, using S=120-30*Arezi Ratio and the first
two of the other timing indicators, produces a target of 83%.

Elan

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