Two weeks ago, I found this e-mail in my inbox:

“This market has all the earmarkings of a major sell off. No one is hedging their positions and the market continues to grind up on zero volume and with continued outflows from equities and inflows into treasuries. I’ve generally been a bull, but I’ve never seen anything like this. The scariest part of this is the lack of insurance buying to hedge positions. This can really cause a catastrophic event if the whole market is long and unhedged. I wouldn’t be surprised to see September-October 2008-type selling in May.”

It’s easy to sound like a Cassandra these days, and if this message had come from someone else, I might have dismissed it. But when Andy Zaky warns of a catastrophic correction, I pay attention.

Zaky, who writes an irregular column called Bullish Cross, is one of the blogger-analysts whose estimates in advance of Apple’s quarterly earnings reports regularly beat the Street’s. (See, for example, here, here and here.)

And I remember his prediction in November 2008 — when the market was crashing and Apple (AAPL) was selling for $90 a share — that the stock would hit $230 within two years. He was so sure he was right, he told the readers on The Mac Observer’s Apple Finance Board, that he was selling his house and putting his money where is mouth was.

A few days after his recent e-mail, Zaky sent another note pointing out that the Chicago Board of Exchange showed a call-to-put ration of 7 to 1, which according to him made April 15, 2009, the most bullish day in the history of the equity markets in terms of sentiment. Then, last week, he sent the chart reproduced above and, in larger form, below the fold.

The chart shows 90 years of Dow Jones Industrial Average data. According to Michal Panzner, who posted it on The Big Picture, whenever the 12-month rate of change in the Dow has exceeded 40%, there’s been trouble ahead. In three cases it marked a short-pause. But eleven times over the past 90 years, it signaled major corrections, including the crash of 1929, the collapse of the dot-com bubble and the crash of 1987.

So what does this mean for Apple, whose share price has increased three fold since Zaky sold his house?

Zaky is still bullish on the company, although he no longer has a position on it one way or the other. He says he wouldn’t be surprised to see Apple to hit $300 a share within the next few weeks, followed by a “massive correction” that pulls it back to $200 this summer.

“I don’t see how Apple doesn’t see $375-400 some time in this secular bull market,” he writes. “It is undervalued. That doesn’t change the fact that it would be dragged down with the market.”

“Let me make one last point,” he adds. “This is or should be all noise to an investor.  Investors shouldn’t worry about short term fluctuations in a stock price. Even someone who bought at $150, saw the stock go to $78 would be better off if he didn’t listen to anyone and just held the stock for the long term.  Investors shouldn’t try to time the market but just hold until the stock either becomes overvalued or gets too close for comfort.

“Or until they feel like they’ve had enough profits.”

NOTE: This is not the first time Zaky has sounded a bearish note about Apple. A year ago he announced that in light of the “increasingly bleak economic environment” he was taking what he called a “cautious view with regard to Apple’s fundamentals and earnings estimates in 2009.”  The stock closed at $121.76 the day that was published. It opened Monday at $271.98.

For more posts about Andy Zaky, see:

• Goodbye iPod, hello iPhone
• Apple’s Q2: A test of fundamentals
• Bearish grunts from a pair of Apple bulls
• The day Apple released its iPhone revenue bomb

[Follow Philip Elmer-DeWitt on Twitter @philiped]