Relishing the present instead of fretting about the future, the U.S. stock market snapped out of its recent indifference, snagged its first gain in three weeks and climbed toward its highest level of 2011.

Living in the now is easy when General Electric (GE) and Intel (INTC) are reporting surging profits. Apple’s (AAPL) income jumped 95% as it overtook Nokia (NOK) as the largest handset provider by revenue, while companies ranging from Qualcomm (QCOM) to United Technologies (UTX) told investors to expect even better earnings this year.

Of the 137 companies in the Standard & Poor’s 500 that have reported first-quarter results, three out of four have beaten profit forecasts—better than the 17-year average near 62%—while just 14% have missed their marks, says Thomson Reuters. Profits are coming in 8% higher than analysts expected—well above the longer-term average outperformance of 2%, though less than the 9% margin by which they were trumping targets the past four quarters. An impressive 69% also beat revenue expectations, with sales coming in 2% better than forecast.

So, the market barely flinched when S&P cut its outlook on U.S. debt from “stable” to “negative,” which paves the way for a future downgrade. Is it because we now see rating agencies as toothless and belated staters of the obvious? Traders expect Washington to take a token—though showy—stab at slowing the rise in our national debt, but not making a real dent for years. That would still favor equities versus government debt. Says Jan Loeys, JPMorgan’s global head of asset allocation: “Governments’ muddle-through approach is a negative for their bonds, but is not bad enough to destroy economies and equity markets.”

So where does that leave us? Money managers love proclaiming that they’re long-term investors and not market-timers, but lately that’s a lie. Anyone sitting on stock-market gains and angling for more are, like Cinderella, dancing with their eyes on the clock. We want to wring the most out of this party, but leave before the bill for this revelry comes due. So we scour the credit markets for signs of a loss of confidence and economic-momentum gauges for the first whiff of a turn, while we watch commodity costs climb toward the day when the crowds might cringe.

With the stock market closed for Good Friday, the Dow Jones Industrial Average ended last week up 164, or 1.3%, to 12,506, its highest finish since June 2008. The S&P 500 added 18, or 1.3%, to 1337, the highest since Feb. 18. The Nasdaq Composite Index jumped 56, or 2%, to 2820, while the Russell 2000 added 11 points, or 1.3%, to 846. Crude oil also rebounded, while gold rose to a new record at $1,503 an ounce.

A year ago, the stock market began a 16% correction, as our central bank wound down its quantitative-easing campaign, dubbed QE1, and as Europe’s debt crisis flared and business confidence plunged. The consensus now believes our economy is on a stronger footing and thus better able to withstand the end of QE2 this June. It helps that employers are hiring anew, and the rush to pay down debt has started to slow, which will allow consumers to spend more of what they earn. But we’re still keeping our eyes peeled for the first sign of trouble, just in case.

Today, cash in money-market mutual funds stands at 17.4% of what Ned Davis Research reckons is the market value of all common stocks, down from 47% in March 2009. “That still leaves a lot of savings the Fed perhaps wants to force into the stock market,” Davis writes, “but I think it’s fair to say the really anxious buyers of stock have already acted.” While Main Street seems vexed by $4.00 gasoline and creeping food inflation, the latest Conference Board survey shows that CEO confidence at the highest in seven years. At these levels, it’s hard to argue that corporate confidence isn’t increasingly priced into the market. So if CEO confidence starts to flag, watch out. Until then, Davis argues, the overall evidence “continues to lean bullish”—no doubt for now (Source: Barrons Online).