How can dogs tell when we're sad?

The question came up while I was watching last night's Glee, during which I cried. It was sad!

Anyway, Indy got very involved in the tears. He nuzzled me. He licked the tears. He sat in my lap. He curled up in the smallest space next to me possible and put his head on my lap. All puppy talk for "Mama don't cry!"

So how do dogs know that we're sad? They don't cry, so it can't be that they recognize tears as sadness from their own experience. Research seems sparse, but anecdotal evidence is clear...dogs can feel your emotions. Indy definitely knows when I'm sad or angry (especially if he's done whatever I'm angry about) and is a good mimic when I'm excited or happy. And there's no doubt he knows when I'm in pain - he'll even put his head on the parts that hurt. Scientists say that dogs can't sense secondary emotions (anything past rage/aggression or other basic emotions) because they don't have them themselves, but dog owners will tell you otherwise. Usually loudly.