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The Stock Market Is a Risky Asset Class in 2013

Chart Courtesy of Thomson/Reuters

The monthly chart for the S&P 500 (1426.19) shown above ended 2012 positive but overbought with the QE3 high at 1474.51 set on Sept. 14 and the October 2007 high at 1576.09. My monthly and annual value levels are 1397.6 and 1348.3 with an annual pivot at 1400.7 and a quarterly pivot at 1431.1. My semiannual value level lags at 1073.9 with my semiannual risky level at 1566.9, which is just below the October 2007 high at 1576.09.

The Yield on the 10-Year Treasury Note (1.759%): My annual value level is 1.981% with a weekly risky level at 1.622% and semiannual risky level at 1.413%. My annual and semiannual value levels are 2.476% and 3.063% with this month's risky level at 1.349% and quarterly risky level at 1.027%.

Comex Gold ($1673.5): My annual value level is $1,599.9 with a monthly pivot at $1,673.8 and semiannual and quarterly risky levels at $1,719.2 and $1,802.9. My annual and semiannual risky levels are $1,852.1 and $1,939.4 versus the all time high of $1923.7 set in September 2011.

Nymex Crude Oil ($91.75): My weekly value level is $91.29 with quarterly risky level at $95.84. My monthly value level lags at $74.23 with annual risky levels at $115.23 and $115.42. My semiannual risky level at $129.97 is well below the July 2008 all time high at $147.27.

The Euro vs. the Dollar (1.3193): My semiannual and monthly value levels are 1.2797 and 1.2343 with weekly and annual pivots at 1.3200 and 1.3257 and quarterly risky level at 1.3334. My annual risky level is 1.4295. Note that the June 2010 low is 1.1880 with the May 2011 high at 1.4941.

The Overall Risk/Reward for U.S. Equities Annual value levels are 12,696 and 12,509 Dow Industrials, 1348.3 S&P 500, 2806 and 2790 Nasdaq, and 809.54 Russell 2000. Annual and quarterly pivots are 1400.7 and 1431.1 S&P 500, 3071 Nasdaq and 821.01 Russell 2000. Quarterly and semiannual risky levels are 13,668 and 14,323 Dow Industrials, 1510.0 and 1566.9 S&P 500, 3274 and 3583 Nasdaq, 5469 and 5925 Dow Transports and 860.25 and 965.51 Russell 2000.

At the time of publication the author held no positions in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Richard Suttmeier has an engineering degree from Georgia Tech and a master of science from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. In 1981 he formed the Government Bond Department at LF Rothschild and helped establish that firm as a primary dealer in 1986. Richard began writing market research in 1984 and held positions as market strategist at firms such as Smith Barney, William R Hough, Joseph Stevens, and Rightside Advisors. He joined www.ValuEngine.com in 2008 producing newsletters covering the U.S. capital markets, and a universe of more than 7,000 stocks. Richard employs a "buy and trade" investment strategy and can be reached at RSuttmeier@Gmail.com.
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