Updated from 6:46 p.m. ET to include information about Micron's analyst conference.

NEW YORK ( TheStreet) -- It remains to be seen if this rally has legs but there's little doubt that stocks have built up quite a head of steam.

As previously remarked, bullishness seems downright contagious these days. Everyone from Dr. Doom to now the Oracle of Omaha thinks U.S. stocks are the cat's pajamas. Staying on the sidelines is getting costly.

The latest sentiment survey from the American Association of Individual Investors put an exclamation point on the rampant enthusiasm for equities on Thursday. The organization asks its 150,000 or so members each week where they think stocks are heading in the next six months, and the bull camp is overflowing at the moment.

An amazing 51.6% of respondents declared themselves bullish this week, up 7.8 percentage points from last week and the highest reading since May 2008. For perspective, the long-term average for bullishness is 39%. Both the neutral and bear camps thinned out over the past week, coming in at 28.2% and 20.2%, respectively, well below long-term averages of 31% and 30%.

The argument for stocks is compelling. The U.S. economy is slowly getting better, bonds yields are negligible, corporate earnings are still growing (albeit at a slower pace), and The Federal Reserve has pledged maximum accommodation with most market watchers expecting a dose of QE3 to come along in 2012 to grease the rails. Thanks to the European Central Bank's long-term refinancing operation in December, the old continent is stabilizing (sort of), and Europe's banks will get another chance to feed at the LTRO's trough later this month.

Against that backdrop, it's easy to see why the bulls are in stampede mode. To be clear, Europe is still a big worry -- past austerity measures haven't exactly worked wonders for Greece -- but judging by the yields on Italian and Spanish bonds, the market is warming up to the idea that the contagion has been contained.

This rally seen some criticism because it's been a low-volume affair, and with the VIX closing below 20 for nearly three weeks now, all volatility seems to have seeped away, which is a trifle unsettling but nothing to get caught up on.

It's also not a great sign that much of the gains have come in the beaten-down stocks of 2011 -- have things really gotten that much better for Netflix ( NFLX) and Bank of America ( BAC)? -- but this is more quibbling than anything else.

Scott Wren, senior equity strategist at Wells Fargo, thinks the U.S. stock market has become something of a safe haven for global investors "because our economy is believed to be more stable and our publicly traded companies' performance is more dependable."

Like everyone else, Wren is wondering how long this rally can last with the Dow Jones Industrial Average getting within shouting distance of 13,000 intraday on Thursday and the S&P 500 setting up to test the highs seen last May.

"Our best guess is that the market will take a time-out over the next several months after the recent run higher," he wrote. "Longer-term investors are still advised to accumulate stocks as valuations are attractive in our opinion. Traders, on the other hand, should consider taking some money off the table as the market tests the 2011 highs."

After enduring the extreme swings that plagued the market from August on in 2011, investors are understandably getting excited about this slow, steady surge. But it's always worth reevaluating when everyone seems to be running in the same direction.

Bespoke Investment Group had this advice for fence sitters.

"Investors who remain risk averse but are still looking to dip their toes in the water and gain some exposure to equities should consider high quality dividend paying stocks," the firm said Thursday. "To some, this may sound like last year's trade, but there are still many stocks out there that provide better yields than Treasuries and have payouts that most would consider to be safe."

Meantime, the performance of Apple ( AAPL), both the stock and the company, is a reason to like this rally, and the shares turned in an impressive 3.5% gain on Thursday, closing at $493.17 and hitting a new all-time high of $496.75 along the way.

AllThingsD reported that the company could unveil the next-generation iPad in March, and there was also some positive analyst chatter to support the move.

Canaccord Genuity reiterated its buy rating on the stock and boosted its price target to $665 from $650, citing expectations that consumers are still snapping up the iPhone 4S in the current quarter.

"Our monthly channel checks indicated very strong sales trends for the iPhone 4S at all three U.S. carriers and overall strong iPhone sales in international markets," the firm said. "We are increasing our March quarter iPhone estimates from 30.1M to 32.6M units."

The company looks like more of a juggernaut than ever, according to Canaccord, which estimates Apple is hogging nearly all of the handset industry's profits.

"With the strong iPhone market share gains during Q4/C2011, we estimate Apple generated a remarkable 80% share of estimated Q4/C2011 handset industry operating profits versus 56% in Q3/C2011 and 48% in Q4/C2010 with only 8.1% global handset market share," the firm said. "Demonstrating the strength of the iPhone's profit share gains during Q4/C2011, Samsung's share of industry profits declined from roughly 26% in Q3/C2011 to 15% in Q4C2011 even though Samsung's share of Android smartphones increased from 35% in Q3/C2011 to 39% in Q4/C2011."

Apple shares have already gained nearly 18% this year, blowing past Exxon Mobil ( XOM) in the market-cap race for the title of world's largest company, $460 billion to $402 billion; and yet the stock still has a reasonable forward price-to-earnings multiple of 10.5X vs. 12.8X for the S&P 500.

Check out TheStreet's quote page for Apple for year-to-date share performance, analyst ratings, earnings estimates and much more.

As for Friday's scheduled news, the earnings roster is pretty thin. Notables include Alcatel-Lucent ( ALU), AllianceBernstein ( AB), Arch Coal ( ACI), Barclays Bank ( BCS), Calpine ( CPN), FLIR Systems ( FLIR), and Flowers Foods ( FLO).

Treehouse Foods ( THS) could be interesting. The company is reporting its fiscal fourth-quarter results on Friday, and expectations are low after it issued a warning late last month. The average estimate of analysts polled by Thomson Reuters is for earnings of 87 cents a share on revenue of $535.8 million.

The stock is down more than 15% in 2012, and the company, which owns E.D. Smith and Bay Valley Foods, has a credibility problem because it ultimately reduced its full-year outlook three times.

The sell side is on the sidelines with 10 of the 15 analysts covering Treehouse at hold and the rest split between strong buy (1), buy (3), and underperform (1). The median 12-month price target sits at $60, implying potential upside of 9% to Thursday's regular session close at $55.07.

Credit Suisse, which has a neutral rating on the stock, lowered its fiscal 2012 estimate to a profit of $3.10 a share from $3.40 a share and cut its price target to $51 from $56 on Thursday. The firm thinks both investors and the company should be wary.

"It is in their best interests to take a cautious approach, reassess its growth algorithm, and accelerate restructuring programs to generate cost savings," Credit Suisse said. "We are concerned that weak volume trends and negative operating leverage will spill over into 2012. While management said that volume improved in January, the monthly data tends to be choppy, and not necessarily indicative of a rebound."

Check out TheStreet's quote page for Treehouse Foods for year-to-date share performance, analyst ratings, earnings estimates and much more.

Another event to be aware of involves Micron Technology ( MU), which is holding an analysts conference on Friday. The get-together is sure to be somber, coming so soon after the tragic death of CEO Steve Appleton on Feb. 3. The Boise, Idaho-based chip maker and CEO Mark Durcan will provide an update on Micron's strategy and its view of current market conditions.

Micron shares are down more than 25% in the past year, but the stock has been a hot property since the calendar turned, rising 30% to close Thursday at $8.16. Credit Suisse previewed the meeting on Thursday, saying it expects to hear about pricing for both NAND flash and DRAM memory products as well as the prospects for Micron's solid-state-drive business.

The firm has an outperform rating and a $12 price target on the stock and thinks the shares are still attractive from a valuation standpoint despite the recent run-up.

"MU is trading at just 0.98x book value - noting that the stock has traded at 1.3x P/B or higher in each of the last 10 calendar years implies at least 35% upside and a share price of $11," Credit Suisse wrote. "Further, we see the potential for a revaluation which would drive shares into the mid-teens as the company starts to generate cash and uses excess cash to buyback stock/debt."

The economic calendar on Friday features trade balance data for December at 8:30 a.m. ET, the initial University of Michigan consumer sentiment gauge for February at 9:55 a.m. ET, and the Treasury Department's budget report for January at 2 p.m. ET.

The consensus view is for consumer sentiment to tick lower to 74 from 75 in January, but Ian Shepherdson, chief U.S. economist at High Frequency Economics, is more optimistic, forecasting the headline number at 77, because of the improving employment picture.

"After five straight gains, which have reversed most of the decline triggered last year by the spike in gasoline prices, the Japanese earthquake and the debt ceiling fiasco, we see scope for a modest correction in the expectations component," he wrote. "But the current conditions component tends to be driven mostly by shifts in jobless claims ... and the decline in layoffs in recent months suggests the index has some way further to rise."

And finally, Nuance Communications ( NUAN) and LinkedIn ( LNKD) will be in the spotlight tomorrow after their respective quarterly reports.

Shares of Nuance were falling in the after-hours session after the voice technology company missed on both the top and bottom lines in its latest quarter, partly because of longer negotiation cycles with mobile companies.

Business social networker LinkedIn, on the other hand, got a boost after its quarterly earnings of 12 cents a share topped the consensus view of 7 cents a share by more than 70%.

-- Written by Michael Baron in New York.

>To contact the writer of this article, click here: Michael Baron.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

More from Opinion

Red Hat CFO Tells TheStreet: Tech Trends Are Still in Our Favor

Red Hat CFO Tells TheStreet: Tech Trends Are Still in Our Favor

Throwback Thursday: Intel Edition

Throwback Thursday: Intel Edition

Intel's Next CEO Should Try Harder to Protect Its Flanks Against AMD and Others

Intel's Next CEO Should Try Harder to Protect Its Flanks Against AMD and Others

3 Warren Buffett Stock Picks That Could Be Perfect for Your Retirement Portfolio

3 Warren Buffett Stock Picks That Could Be Perfect for Your Retirement Portfolio

Wednesday Wrap-Up: GE and Facebook

Wednesday Wrap-Up: GE and Facebook