For eight months, Ed Keon has reigned supreme as Wall Street’s unquestioned superbull. But no more. Mr. Keon, the chief investment strategist of the Prudential Equity Group, has, like Judy Garland’s Dorothy, taken leave from the land of Oz, which, for a strategist, can be an especially dangerous move in a market as rife with risks as the market is now.

All too often, stock bulls, like gold bugs, only see sunshine and doggedly stick to their point of view through thick and thin, even at times when such a conviction is clearly questionable.

Not so for superbull. On Monday, Mr. Keon ditched his euphoric market forecast – a 2006 wrap-up in the S&P 500 of 1,530, a gain of more than 22% from 2005’s close of 1,248.29. To his credit, he threw in the towel after recognizing his bullish case had holes in it, although he still believes stocks will finish the year higher, with the S&P 500 wrapping up 2006 at 1,350.

Mr. Keon was dubbed superbull by some of his colleagues after boldly urging clients in July 2005 to weight their portfolios 100% in equities, an asset allocation he felt should be maintained in 2006, as well. In other words, no bonds, no cash, strictly stocks. Given last year’s mediocre market, it was hardly an award-winning call.

Now, though, he’s had second thoughts about maintaining this stock weighting, leading him to knock down the equity portion to 55%, with bonds at 35%,and cash 10%. He’s making this change, he says, even though he believes stocks offer compelling valuation, versus the two other big alternatives – bonds and real estate.

Why the change of heart? Because, he explains, of recent damage to each of the four pillars that supported his 100% stock weighting. That all-stock recommendation was based on his expectations of a drop in inflation, individual investors rediscovering American stocks, ongoing growth in earnings and the GDP, albeit at a slower pace, and a little luck on natural and manmade disasters.

Mr. Keon thought that if all four things occurred, equity valuations (P/E ratios) might rise two multiple points and stocks would have a big year.

He emphasizes that damage to just one of his pillars would have been insufficient to prompt him to alter his thinking. But all four collapsing at once, he says, has forced him to change his recommendations.

So what’s gone sour?

For starters, he notes that lower productivity, wage gains, and high energy prices have hurt his case for lower inflation; likewise, first-quarter earnings, excluding energy, growth expectations, look to him like they may trend to zero.

The tense situation over Iran’s nuclear ambitions also worries him. He believes Saturday’s decision to refer Iran to the U.N. Security Council suggests the crisis might have legs as the world tries to stop Iran from developing nuclear weapons. It doesn’t matter what happens in Iran, he says; it is the uncertainty that tends to be bad for markets.To Mr. Keon, it looks as though the situation will take months to reach a conclusion, meaning, he points out, stocks will remain under pressure.

Given the heightened risks, Mr. Keon says, it’s hard to make a case for the kind of multiple expansion he previously predicted.

As a result of his newfound caution, Mr. Keon is advising clients to underweight investments in such equity areas as consumer discretionary, industrials, and financials. At the same time, he is returning to an overweighted stake in energy, adding to his overweighted position in telecommunications and establishing a small overweighted holding in utilities.

So that’s it from a strategist who has gone from superbull to bad news bull.