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Market showing stability, but do you bite?

A funny thing’s been happening over the course of the past week or two.

Despite mounting layoffs and dismal earnings data, some badly beaten-down stocks are starting to show some resiliency and improvement.

I’m thinking here of Mosaic (MOS) and Apple (AAPL), just to name a couple.

Nothing seems to explain the fact that Mosaic, which had fallen from the $40s to the $27 range in December, charged back to above $45 during the past week.

Apple, which had taken a drubbing for more rumors about its CEO Steve Jobs’ health and was clinging to the 80s, finished Friday just below $100 a share.

Raise a glass to the buy-and-holders. If I had stayed in either one of those stocks I would have been back in the money.

But I didn’t and I’m not.

It seemed like old times watching Jim Cramer on “Mad Money” on Friday, too.

He seemed to be emboldened and working with a new energy as his sound effects panel shouted, “Buy, buy, buy!”

But should you?

The market has, indeed, been showing some resiliency. Each time the Dow has dipped below 8,000 it seems to fight its way right back up.

Friday’s 217-point rally in the Dow put the index firmly back at the 8,200 level.

But there is still a preponderance of bad news out there.

The nation’s unemployment rate edged up again to 7.6 percent and it’s actually news these days if a company isn’t announcing any layoffs.

This past week The Wall Street Journal reported that retailers, slammed by the recession and the associated lack of consumer spending, had stopped making earnings forecasts about upcoming quarters because their projections are too predictable, given the bloodshed that is almost sure to continue.

So why is the market moving up — or at least stabilizing?

Investor’s Business Daily took a stab at an explanation over the weekend in an editorial titled “A Tale of Two Indicators — Jobs and Stocks,” penned by CNBC personality and economist Lawrence Kudlow.

In it Kudlow writes of the widely held belief that the stock market is a forward-looking beast, while economic data view things in the rear-view mirror.

“So stocks may now be telling us that the gloom-and-doom crowd — and its pessimistic economic prognostications that cover all of 2009 and in some cases 2010 — is about to be proven wrong,” Kudlow writes.

Kudlow theorizes that cheaper energy, the creation of new money and current financial system rescue initiatives could bode well for a pleasantly surprising 2009.

Then again, Kudlow has always fallen on the side of optimism.

As for me, I’m encouraged, but I want to see this faint light at the end of the tunnel shine on for more than just a couple of weeks before I wade back in to the market.