The sands of time are sinking, but it still looks as if stocks want to take one more shot at the upside before the year-end rally runs into heavy resistance (probably during the first half of December). After Wednesday’s smash, a few pieces of cheerful news popped up Thursday and again Friday — enough to hoist the Dow over 350 points across those two days, out of danger territory for now.

First, that key gauge I told you to watch in Tuesday’s blog — Italian 10-year bond yields — eased to about 6.5% at the end of the week. Italy certainly isn’t out of the woods yet. However, it’s a relief that the country’s government-bond yield fell back below the perilous 7% threshold.

Recall, it was a spike above 7% that forced Greece, Ireland and Portugal to seek bailouts from the EU. Italy’s public debt, at $2.6 trillion, is bigger than those other three nations’ combined. So if Italy’s borrowing costs really were to ring the 7% “plague bell” for more than just a day or two, there’s good reason to fear that Europe’s financial woes would quickly escalate.

In other upbeat news this week, the Labor Department reported that its weekly count of first-time claims for unemployment insurance fell to 390,000 — a seven-month low. While that’s still too high to signal major improvement in the jobs outlook, the trend is in the right direction. No double-dip recession for now.

Oh, and did I mention? The Greeks got a new prime minister, technocrat Lucas Papademos. Good luck to him, dealing with the country’s crushing debt and 18% unemployment rate.

All things considered, I think the market can bounce for another couple of weeks, probably into the 1,300-1,325 range for the S&P 500. But I don’t see a lot of upside beyond that in the first months of 2012.

Hence, I would be very strict with new stock purchases. Don’t chase prices upward. Take profits frequently.