This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Stocks Are Up but Remain a Risky Asset Class in 2013

NEW YORK ( TheStreet) -- The new year is off to a solid start for U.S. equities, and while this strength can continue near term, I stand by the theme I wrote on Jan 2, in The Stock Market Is a Risky Asset Class in 2013.

Next week is an important week for earnings, as 13 money center and regional banks with buy ratings report their quarterly results. I profiled them on Thursday, Jan. 10 in Buy-Rated Big-Bank Stocks to Trade Pre-Earnings. Positive results from the banking system should prolong the near term stock market rally. Otherwise, next week's closes could be disappointing as pivots from my proprietary analytics act as magnets pulling stocks back down.

As I have been reporting recently, the fundamentals for the stock market are not cheap. At we show that only 42.7% of all stocks are undervalued with 57.3% overvalued. In addition, all 16 sectors are overvalued with eight overvalued by double-digit percentages; consumer staples by 24.3%, construction by 20.3%, transportation by 20.0%, industrial products by 17.2%, finance by 13.4%, medical by 12.4%, computer and technology by 12.3% and retail-wholesale by 11.9%.

Here are the pivots that have been magnets already in January:

The Yield on the 10-Year Treasury Note (1.894%): The rise in yield so far in January has held my annual value level at 1.981%. The 1.981% yield should be a magnet for all of 2013 keeping the low yield environment in tact. My annual and semiannual value levels are 2.476% and 3.063% with my semiannual risky level at 1.413%.

Comex Gold ($1,673.50): My annual value level is $1,599.90 with a monthly pivot at $1,673.80 and semiannual, quarterly and annual risky levels at $1,719.20, $1,802.90 and $1,852.10. I expected the monthly pivot to be a magnet in January and it was tested on Thursday, but don't expect a re-inflation of the gold bubble.

Nymex Crude Oil ($93.89): My monthly value level lags at $74.23 with a quarterly risky level at $95.84 and annual risky levels at $115.23 and $115.42. While oil should trade up to my quarterly risky level, do not look for a re-inflation of the oil bubble either.

The Euro vs. the Dollar (1.3253): My semiannual value level is 1.2797 with an annual pivot at 1.3257 and quarterly risky level at 1.3346. My annual pivot was tested on strength Thursday and the euro is slightly above this level this morning. The supports a trading range environment I have predicted for 2013.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $92.69 -0.59%
FB $119.49 1.40%
GOOG $711.11 1.40%
TSLA $214.84 1.60%
YHOO $37.23 0.79%


Chart of I:DJI
DOW 17,740.63 +79.92 0.45%
S&P 500 2,057.14 +6.51 0.32%
NASDAQ 4,736.1550 +19.0610 0.40%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs