Dow Could Hit 11,500, But Downside Risk Greater

A veteran market watcher who correctly called the bear in 2008 and the recovery in 2009 says the current state of Wall Street is much less clear.

Today's market is "neutral to positive" but overvalued on a fundamental basis, says Richard Suttmeier, chief market strategist at Niagara International Capital and ValueEngine.com, in an interview on Yahoo's Tech Ticker financial news web site.

A year ago this week, the stock market began a historic rally from the depths of the worst bear market since the Great Depression. Technically, there was a "perfect storm for a bottom" in March 2009, says Suttmeier, one the few market watchers who were correctly bearish in 2008 and called the turn in 2009.

Today, Suttmeier says the outlook is far-less clear. Technically, the market is "neutral to positive" but overvalued on a fundamental basis, he told Tech Ticker. The veteran market watcher believes short-term momentum could take the Dow as high as 11,500 in the near term and is long tech names such as Cisco, Intel and Adobe Systems.

But the market's "downside risk is a lot more than that upside potential," Suttmeier says, advising investors to "take money off the table" into additional strength.