Gina Martin Adams of Wells Fargo was Wall Street's biggest bear in 2013, predicting that the would close the year at 1,440 even as the market skyrocketed. In 2014, she once again has the most bearish target on the Street, predicting that the S&P will close out the year at 1,850—pretty much exactly where the index finished 2013.
But that doesn't mean she expects the stock market to just stay put over the coming months.
"You can easily make the case for stocks to jump 300 points this year, as well as to fall 300 points this year," Adams said on Tuesday's episode of "Futures Now." "I think the story this year will be one of greater volatility, simply because we are in this environment of chance in monetary policy, and it can go in either direction."
Adams, institutional equity strategist at Wells Fargo, says her call for 2013 was hamstrung by a misreading of the Federal Reserve.
"We had anticipated that by the second half of 2013, the Fed would start to incrementally remove, or at least taper back on, some of their quantitative easing programs," Adams granted. "So what we missed for the most part was that the Fed kept the party going all the way through the end of 2013, contrary to our expectations."
For 2014, "the way we back into our 1,850 price target is by saying that this Fed is going to be very, very hesitant and kind of keep the reins the best they can on financial market activity," so while the market multiple will contract as it typically does when the Fed makes policy more restrictive, "we're going to have a below-average contraction in the multiple," Adams said.
At the same time, inflated expectations could prove the market's Achilles' heel.
"In 2013, everyone was suggesting that growth would be kind of stagnant, and that set us up for a period of time in which growth could exceed expectations. I think the opposite is the case this year," Adams said. "Growth probably will incrementally improve in 2014. At this point, we seem to have priced in much better growth expectations, and that's the risk."
In addition, the fact that Wall Street has become so bullish is a worry in and of itself.
"There's this polarization that has occurred, leaving everyone kind of piled to one side of the boat—and we all know what happens when everyone piles to one side of the boat," Adams said. "So I'd say sentiment is a huge risk right now."
All in all, Adams advises caution.
"I don't think that the market is at a point right now where you want to start shorting it—we have a balanced outlook," Adams said. But "you do want to make your selections pretty carefully. Focus on alpha generation at the sector and industry and ticker level."
(Read more: Why all signs point to a weak 2014 for this sector)
And Adams says that if the market does drop 300 points, "we think that it's a buying opportunity—and a gift, really, to investors to get into this equity market, which does have a very bullish undertone overall."