Steven Leuthold, the longtime bear who wisely shorted stocks in 2008 and then presciently turned bullish in 2009, says 2010 will feature some strong gains for the market — and then some significant losses.

According to Registered Rep. magazine, Leuthold writes in his latest “Green Book” report that the S&P 500 should climb another 20% or so in 2010. Then, however, Leuthold says it “will give up those gains in the second half of the year.”

Leuthold’s firm is currently maintaining a 65% to 67% exposure to equities, close to its maximum of 70%, Registered Rep. notes. The firm has also lowered its exposure to high-yield bonds.

Registered Rep. also offers some good background into Leuthold’s approach, noting that he and his team use a five-year, “normalized” P/E ratio of the S&P 500 to gauge value. That’s because earnings are cyclical in nature. “Near the bottom of an economic contraction, with corporate earnings reduced dramatically, P/E ratios can look very high,” the firm says. “However the best buying opportunities are often presented around cyclical economic nadirs. This is why it is important to use normalized earnings.”