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No. of Recommendations: 12

* 7/20 7/27 8/3 8/10/20
S&P 500 Index 3224.73 3215.63 3271.12 3351.28
Trailing 12 month PE 32.47 32.61 33.31 35.61
Trail Earnings yield 3.08% 3.07% 3.00% 2.81%
Forward 12 month PE 25.17 24.26 24.53 25.05
Fwd Earnings Yield 3.97% 4.12% 4.08% 3.99%
90 day tbill yield 0.11 0.11 0.09 0.10
10 year tbond yield 0.64% 0.59% 0.55% 0.57%
Arezi Ratio 0.04 0.04 0.03 0.04
Fed Ratio 0.16 0.14 0.13 0.14

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 118%
stocks, -18% 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 98%.

An alternative allocation, using S=120-30*Arezi Ratio and the first
two of the other timing indicators, produces a target of 109%.

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