YOU might say 2010 began with a bang.

Stock indexes kicked off the new year’s first session with rare gains of more than 1%, and the opening number was backed by a rousing chorus: Auto sales are up, factories are buzzing with a hum unheard since the spring of 2006, and even Taser International (ticker: TASR) delivered a happy jolt with news of a big shipment of stun guns to Brazil — just in time for Carnaval.

Impressively, the vibe survived even after the market hit a discordant note. The government said Friday that employers had cut 85,000 jobs in December, disappointing those expecting hiring to begin anew (although officials revised November’s payrolls to show a marginal gain of 4,000 — the first job creation since the recession started). Yet stocks shrugged off the blow to inch higher Friday.

The Standard & Poor’s 500 rallied for the fifth time in seven weeks and the Nasdaq Composite Index added 48, or 2.1% to 2317 and is up 83% from its March low. The Russell 2000 jumped 19, or 3.1%, to 645.

Fresh highs were logged by sectors as disparate as financials, materials and semiconductors, and crude oil snaked higher on 11 of the past 12 trading days. In a potential break from 2009 patterns, commodity strength didn’t come at the dollar’s expense, and the buck fell less than 1% against both the euro and yen. Is this evidence investors are starting to look beyond the cost of government bailouts, toward the resulting, hard-won recovery?

Some 85% of S&P 500 stocks are now ahead of their 50-day averages. The median stock in the benchmark fetches 22.2 times earnings, and while many investment advisers are bracing for an inevitable but mild correction, a whopping 72% are bullish. A well known research firm warns the market is becoming “overvalued and over-believed,” but he is still tilting bullish, perhaps mindful of the danger of fighting market momentum too early.

So here we are, noses to the wind, straining to catch the first whiff of trouble. Our checklist of warning signs: A jump in the 10-year Treasury yield and long-term interest rates, a shunned Treasury auction that signals sated appetite for U.S. debt, and any hint of faltering global growth. Most important, if more good news fails to lift shares, that would suggest expectations have become too exacting. But there was no such failure amid last week’s celebration (Source: Barrons Online).