A delighted fund manager the other day characterized stock market guru Elaine Garzarelli as “a woman for all seasons.”

No wonder: Last January, she pounded the table for stocks, predicting a strong market in 2006. In May, she had second thoughts, turned cautious, and forecast a 5% to 10% near-term decline. Right on. By mid-June, the S&P 500 had fallen 7.5%.

At that time, she once again shifted gears by turning bullish, and she has held to that strategy ever since. Again, she was right on the money: Following her mid-June call, the Dow climbed to an all-time high and several other major averages, such as the S&P 500 and Nasdaq, set six-year highs.

Ms. Garzarelli was the stock market’s most influential guru of the 1980s and early 1990s, when investors hung on her every word. Now, as skipper of Garzarelli Capital, she provides investment advice to 110 institutional clients with aggregate assets of more than $1 trillion.

“Houdini reborn; she’s got her old magic back,” the fund manager says.

So, the obvious question for Ms. Garzarelli, who has essentially been bullish since October 2002 (a period during which the S&P 500 has risen more than 80%), is: What’s her crystal ball showing for 2007?

She remains gung-ho, predicting another winning year — about a 15% gain in the S&P 500. Accordingly, she thinks equity portfolios should be 100% invested, with about 10% in emerging markets. Her indicators — which embrace such market measures as the economy, monetary conditions, valuation, and investor sentiment — are 65% bullish. That, she says, is very bullish. The indicators, she also observes, suggest the S&P 500 is about 20% undervalued.

Elaborating on her exuberant market stance, she offers some of the following reasons:

• Earnings are coming in strong. For example, third quarter after-tax profits were up 31% versus a year ago, the highest level ever.

• Profit margins are very strong and rising, thanks largely to solid reductions in labor costs and strong productivity gains.

• The Fed is through raising rates, while other economies are increasing them.

• Labor costs — 70% of a company’s cost of doing business — remain quite low, aided by a glut of labor around the world.

• Inflation is slowing.

Like her peers, Ms. Garzarelli sees slowing economic and earnings growth next year, but she says she feels that slowdown will not interrupt the ongoing bull market. “If the Fed were to tighten again, it would be over, but there’s no indication that it will,” she says.

Only two things worry her, she tells me. One would be a crash in the dollar, which, she notes, would cause foreigners to pull money out of America. In turn, she points out, this would prompt the Fed to raise rates to stabilize the greenback. Her other concern: a 20% chance of a recession.

The dollar’s decline, Ms. Garzarelli hastens to point out, should not be viewed as a matter of alarm. She notes, for example, that while the dollar fell more than 20% in 1985 and 1986, the S&P 500 rose more than 40%.

What about the Democrats regaining control of the House and the Senate in the recent elections? “Political gridlock, I love it,” she says.”It means nothing will change and nothing will get down.”

Her favorite market themes: capital spending, such as on equipment and computer-related products, which should benefit from strong corporate profits and cash flow; and the beneficiaries of net exports, which should capitalize on a weak dollar and strengthening global economies.

Technology companies, notably semiconductor outfits such as Texas Instruments and Motorola, are seen as a major beneficiary of both themes. An exchange-traded index fund, the iShares Goldman Sachs Semiconductor Index, is also favored. Chemicals, another beneficiary of the weak dollar, also get a favorable nod, namely Dupont and Dow Chemical. Ditto Altria, which realizes 60% of its sales from abroad.

Ms. Garzarelli takes a shine, as well, to the beaten-up homebuilding stocks, especially Hovnanian and KB Homes, which are down about 50% and 35% respectively from their 52-week highs.

While a number of pros describe the market as tired and overbought, our bull vehemently disagrees. Her final thought: “Any way you look at it, it’s just the wrong time to be a wimp.”

dandordan@aol.com