S&P to ‘1,500 or below’: Strategist

There's a good deal of risk in the stock market that many investors are ignoring, Jones Trading Chief Market Strategist Mike O'Rourke said Friday.

"I think we'll go 1,500 or below," he said. "A lot of this rally has been a multiple-expansion rally. We know earnings are up, but most of that growth came in 2010. Even this year's been a better earnings year, but we see a lot of low-quality earnings beats. And I think the market does see that."

On CNBC's "Fast Money," O'Rourke added that flows of capital into U.S. stocks were overwhelmingly into exchange-traded funds.

"I think that's blind buying because it's just an asset allocation," he said. "It's not people buying stocks because they think they're cheap or they're good values. It's people just wanting to have exposure in the markets. And we're at all-time highs. It's a big risk, and now you're having a big rise in interest rates."

(Read more: Where to find bigger stock market gains: Stephanie Link)

O'Rourke said that the S&P 500, whose all-time intraday high was 1,698, would likely head toward 1,500 in the next six to 12 months.

"There's so many uncertainties out there," he added. "I view my job as measuring risk vs. opportunity, and I see a lot of risk that can unfold in the second half of this year that people seem to be ignoring for the time being."

O'Rourke offered a historical perspective.

(Read more: Defense stocks are overextended: Carter Worth)

"From 1928, 1930, to 2000, the U.S. economy grew 3 to 3½ percent a year," he said. "Since 2000, we've grown 1.7 percent a year. Even if you forget about the Great Recession, you go to 2007, we grew at 2½ percent a year."

O'Rourke said that the so-called "Great Rotation" from bonds into stocks carried inherent risk.

"If you see a 'Great Rotation' occur at this point, the sell-side has trained investors to watch for the 'Great Rotation' and then participate in it," he added.

By CNBC's Bruno J. Navarro. Follow him on Twitter @Bruno_J_Navarro.

Trader disclosure: On Aug. 9, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Simon Baker is long AAPL ; Simon Baker is long GOOG; Simon Baker is long NFLX; Simon Baker is long C; Simon Baker is long RAX; Simon Baker is long PCLN; Simon Baker is long MSFT; Stephen Weiss is short JCP; Stephen Weiss is long BBRY; Stephen Weiss is long POT; Stephen Weiss is long MOS; Pete Najarian is long AAPL; Pete Najarian is long BAC; Pete Najarian is long C; Pete Najarian is long BBRY; Pete Najarian is long SBUX; Pete Najarian is long FB; Pete Najarian is long VALE; Pete Najarian is long NSC; Pete Najarian is long BMY; Pete Najarian is long PFE; Pete Najarian is long MRK; Pete Najarian is long LLY; Pete Najarian is long KRE; Pete Najarian is long EMC; Pete Najarian is long COP; Stephanie Link is long AAPL; Stephanie Link is long JPM; Stephanie Link is long WFC; Stephanie Link is long CSCO; Stephanie Link is long FB; Stephanie Link is long JOY; Stephanie Link is long GPS; Stephanie Link is long VALE; Stephanie Link is long EBAY; Stephanie Link is long YUM.