After roughly a 15% sprint in the Dow in recent months and bullish sentiment overwhelming, I raised a question in a recent column, namely, How high is up for the rampaging Dow?

That was a pretty dumb question, according to the chief investment strategist for Oppenheimer & Co., Michael Metz, who says the more appropriate one is, How deep will the correction run?

Mr. Metz — in one of those contrarian bearish forecasts in which you can wind up looking awfully smart or awfully stupid — contends we’re in the midst of a “serious market correction” that kicked off Monday with about a 155-point drop in the Dow. He believes this drop is the prelude to a wicked decline in the index of about 700 points to around the 11,500 level in the next four weeks. He also figures that the market has just about peaked for the year.

His projected market tumble, nearly a 14% decline, is hard to imagine in the current environment, given the wave of bullish sentiment on Wall Street and the sizable amount of money on the sidelines (about $1.3 trillion in moneymarket funds alone).

Mr. Metz argues that most of the recent rally reflected momentum investing (chasing the winning stocks), a trend that was broken Monday. He sees Wall Street’s so-called hot money — notably commodity trading advisers (or CTAs, as they’re called) and hedge funds — shifting away from stocks and bonds and pouring into currencies and commodities.

Both the CTAs and the hedge funds are lagging the market this year, with average respective puny gains of 2% and 7%. As such, Mr. Metz expects a volatile and “Wild West” Wall Street environment over the next four weeks as they try to play catch-up and jazz up their 2006 performances. “In simple language, we’re in for a wild and treacherous year-end wrapup,” Mr. Metz says. He sees big money pouring in and out of selected stocks, leading to huge market volatility.

Speaking of big money, that’s certainly in abundance here, what with the nation’s roughly 8,000 hedge funds boasting assets of about $1.5 trillion, while CTAs sport assets of $70 billion, though controlling through derivatives more than $1 trillion in commodities and currencies.

Mr. Metz’s advice to the country’s 78 million stock players: “I’d go on vacation for the next few weeks unless you have a stomach for wild and crazy gyrations.” He reasons there will be no progress for stocks in December, but rather a roller coaster ride best summed up by Shakespeare in “Macbeth” with the words: “full of sound and fury and signifying nothing.”

Adding to the market’s woes, as our worried strategist sees it, are deteriorating fundamentals:

• Durable goods orders are disappointing, suggesting that capital spending, contrary to expectations in many quarters, won’t be a major contributor to the 2007 economy.

• Even though Fed chief Ben Bernanke is bullish about a “soft landing” in housing, the evidence, such as rising inventories and badly slipping prices, suggests otherwise. It means the consumer is likely to be more cautious next year after his holiday spending binge.

• The decline in the dollar, though bullish for exports in the longer term, could cause stresses in the financial system in the near term and “upset stocks, bonds and everything.”

Indeed, Mr. Metz believes that if the dollar falls more, OPEC will talk about denominating oil in a basket of currencies rather than in dollar terms. In turn, he says, it could push up the price of both oil and oil stocks. In this context, he favors a trio of energy stocks — Anadarko Petroleum, Apache Corp., and Hess Corp. — all of which he views as takeover candidates.

Other investments favored by Mr. Metz are gold, big-cap quality blue chips with international exposure and foreign markets, particularly Japan, Germany, and China. In currencies, he rates the yen as especially attractive and grossly undervalued.

On the other hand, our market bear says he would shun technology and retail stocks — technology because of his skepticism about a rise in capital spending and retail because he rates it as a zero-growth sum game (where one retailer wins at the expense of another). His parting thought: “Watch out; we’re on dangerous ground!”