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Stocks Are Up but Remain a Risky Asset Class in 2013

My main theme for 2013 is that the stock market is a risky asset class in 2013. The major averages ended 2012 below some key levels for 2013 and they soon became pivots after stocks began the year to the upside.

However these levels are now magnets for the remainder of their time horizons and have an 85% chance of being tested again during these timeframes.

  • My quarterly pivot is 1431.1 on the S&P 500
  • My quarterly pivot is 3071 on Nasdaq
  • My annual pivot is 5469 on Dow Transports, which was tested on weakness on Tuesday.
  • My annual pivot is 860.25 on the Russell 2000.
  • The near-term upside on holding these pivots is my quarterly risky level at 13,668 on the Dow Industrial Average.
  • The Dow Industrial Average (13,471): Monthly, and annual value levels are 12,818, 12,696 and 12,509 with quarterly and semiannual risky levels at 13,668, 14,118 and 14,323. The QE3 high is 13,661.87 set on Oct. 5 with the October 2007 high at 14,198.10. Note that the all-time closing high is 14,164.53 set on Oct. 9, 2007.

    The S&P 500 (1472.1): Annual and monthly value levels are 1400.7, 1397.6 and 1348.3 with a quarterly pivot at 1431.1 and quarterly and semiannual risky levels at 1510.0 and 1566.9. The QE3 high is 1474.51 on Sept. 14 with the October 2007 high at 1576.09.

    The Nasdaq (3122): Monthly and annual value levels are 2934, 2806 and 2790 with a quarterly pivot at 3071 and quarterly and semiannual risky levels at 3274 and 3583.

    The Nasdaq 100 (2744): Monthly and annual value levels are 2610, 2463 and 2385 with quarterly and semiannual risky levels at 2798, 2920 and 3196.

    The Dow Transportation Average (5470): Quarterly and monthly value levels are 5094 and 5012 with an annual pivot at 5469 and quarterly, annual and semiannual risky levels at 5634, 5925 and 5955. The all-time high at 5627.85 was set on July 7, 2011. The all-time closing high is 5618.25 set on July 7, 2011.

    The Russell 2000 (881.24): This index set a new all-time high at 883.19 on Thursday. Quarterly, monthly and annual value levels are 821.01, 813.37 and 809.54 with an annual pivot at 860.25 and quarterly and semiannual risky levels at 913.92 and 965.51.

    The PHLX Semiconductor Sector Index (SOXX) (400.73): Quarterly, monthly and annual value levels are 371.62, 347.83 and 338.03 with quarterly and semiannual risky levels at 440.36 and 520.17. Semiannual and annual value levels are 325.99 and 274.16.



    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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