If the first week of 2011 is any indication, the stock market is raring to go and also a little afraid to do so.

Stocks began January with a 1.1% pop—its best day since the first days of December—that quickly gave way to second guessing and buyers’ remorse. Those scouring December’s economic data for corroboration got only mixed signals, with the service sector growing at the fastest pace since 2006, but tentative employers hiring just 103,000 new workers.

The enthusiastic start hews to a 2010 pattern and shows money managers anxious to buy—or at least anxious not to get left behind. The Standard & Poor’s 500 index gained 142.5 points in 2010, and 133.5 of those came on the first trading days of each month. Is it any wonder? Only 21% of mutual funds had outperformed the S&P 500 last year, with cautiously positioned money managers often doing better when the markets slipped but lagging whenever the market surged. Throw in a central bank hell-bent on inflating asset prices, and a growing consensus that our economy is improving, and the anxiety not to miss rallies grows more acute as 2011 begins.

Momentum has also been a force. The S&P 500 hasn’t closed beneath its 50-day average in more than four months —a feat seen just once in the past decade, in 2003. The U.S. stock market ended 2010 with a 12.8% gain but is up 20% in the year’s final four months. The past 30 years or 120 quarters have produced only 16 quarters where the S&P 500 rallied 10% or more, and two of those lined up back-to-back in the latter half of 2010. And after more than two years of steering money from stocks toward bonds, investors have put more than $6.5 billion into stock mutual funds since mid-December, as they yanked $4.7 billion from bond funds. Two weeks do not a new trend make, at least not yet, but it complicates the logical decision to pull back from stocks.

Meanwhile, there are unmistakable signs of froth. Exhibit A is China Shen Zhou Mining & Resources (ticker: SHZ). Who, you ask? All you need to know is the company has a Beijing address and owns fluorite and copper mines in the Mongolia region, and shares listed at the American Stock Exchange have nearly quadrupled since December. Meanwhile, surveys show investors becoming more bullish, and more fully invested mutual fund managers with less dry powder at their disposal. And have you heard the giddy swirl of takeover gossip lately?

Investors also seem anxious to take profits, at least in the short term, which could create a scramble for the exits should the selling begin. December sales rose 3.1% at 28 retailers tracked by Thomson Reuters, less than the 3.4% forecast but not at all bad considering the blizzard that blanketed the Northeast after Christmas. Yet you’d never know from the 1.5% drubbing meted to retail stocks Thursday, compared to the S&P 500’s 0.2% ebb. Auto parts retailers, another of 2010’s big winners, pulled back 5% to start this year (Source: Barrons Online).