In recent weeks, bearish sentiment has been everywhere, spearheaded by the swelling number of both mortgage writedowns and triple-digit one-day losses in the Dow Jones Industrials. The press, in turn, bombarded investors with stern warnings about the vulnerability of the stock market.

What a difference a day makes. After the stock market’s close on Wednesday — the day the Dow rocketed 331 points, the biggest one-day gain since September 2003 — an entirely different story was being told on two of the financial networks. On Bloomberg and Fox Business, it was the same cheery message from one market expert after another: The worst is over.

Not only that, some interviewees pounded the table for stock purchases, pointing out that equity valuations were cheap, that the Federal Reserve had clearly turned friendly, and that there was huge cash on the sidelines (more than $4 trillion in moneymarket funds alone), making it a propitious time to buy.

Maybe so, but not everyone buys that happy talk. Count among them Gary Wollin, who has been a fixture on the investment scene for the past 47 years. A former Bear Stearns broker who is a relative unknown to the public at large, he currently manages nearly $100 million of wealthy clients’ assets at a San Francisco money management firm bearing his name.

Taking note of Wednesday’s jump in the market, he says “it was a one-day thing,” arguing that the rally will have no staying power because he believes the housing and subprime crises will extend into both medium- and high-quality mortgages. “Just read your local paper or turn on your TV set: There’s a new housing horror story with each passing day,” he says. Likewise, he points to an economy that has gone from “high growth to slow growth and soon to no growth.” It means, he says, a sharp downturn in earnings is close at hand. Mr. Wollin says he believes a recession kicked off in late summer: He sees it manifesting itself in rising unemployment, acceleration of home foreclosures, and sharply rising credit card delinquencies. He expects the jobless rate, currently at 4.7%, to climb to 5% in the first quarter and to between 5.25% and 5.5% by the end of the second quarter.

In recent days, the market has rallied, largely triggered by the almost unanimous belief that Federal Reserve officials will once again lower interest rates when they meet December 11. Also fueling the rally was the recent decision by the investment arm of Abu Dhabi to shore up Citigroup’s ailing balance sheet by injecting $7.5 billion in cash into the giant bank for a 4.9% stake. Citigroup has recently been stung by billions of dollars of credit losses, and as much as another $11 billion of such losses looms in the wings. Brisk short covering has also helped spur the rally.

The subprime and housing crises have conjured up Wall Street fears that stocks could also get slammed from a financial accident, such as a known financial company going belly up. Mr. Wollin says there’s a good chance it could happen.

As a potential bankruptcy candidate, much Street speculation continues to center on Countrywide Financial, one of the country’s biggest mortgage lenders. The company rejects Street talk of a possible bankruptcy, but a $1.2 billion third-quarter loss, ongoing deterioration in housing, and a collapsing stock price are prompting numerous skeptics to greet the company’s denials with a grain of salt.

As far as stocks go, Mr. Wollin, who says his average client is up a market-beating 6% this year, suggests we could see “blood on the Street” sparked by a wave of year-end tax-loss selling that he says could help knock the Dow down to 12,000 or slightly lower. Yesterday’s close was 13,311.73.

“I wouldn’t buy any stock now,” he tells me. “The most sane and sensible strategy is to raise cash, which is now king again.” Mr. Wollin is giving more than lip service to such a recommendation: His fund is currently about 33% cash, up from 7% about three months ago.

Among his current stock holdings are Procter & Gamble, Johnson & Johnson, Microsoft, and IBM, which he considers relatively safe plays. “I want to sleep at night and they’ll all be here tomorrow,” he says.

A bearish hedge fund trader recently quipped, “Santa better stay away from Wall Street this year; he’ll be stoned if he shows up.” Those are Mr. Wollin’s sentiments precisely.

dandordan@aol.com