*                         6/8      6/15     6/22     6/29/26
S&P 500 Index             7383.74  7431.46  7500.58  7354.02
Trailing 12 month PE      32.69    32.90    33.21    32.24
Trail Earnings yield      3.06%    3.04%    3.01%    3.10%
Forward 12 month PE       22.21    22.35    22.56    22.17
Fwd Earnings Yield        4.50%    4.47%    4.43%    4.72%
90 day tbill yield        3.78     3.78     3.83     3.83
10 year tbond yield       4.55%    4.48%    4.46%    4.38%
Arezi Ratio               1.24     1.24     1.27     1.23
Fed Ratio                 1.01     1.00     1.01     0.93

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 58%
stocks, 42% 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 38%.

An alternative allocation, using S=120-30*Arezi Ratio and the first
two of the other timing indicators, produces a target of 73%.

Elan

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