The Nasdaq snapped back a bit last week, gaining about 10% after the previous week's 25% drop. Not surprisingly, the Blue Chip techs were among the better performers. The fact that the market didn't keep heading south is good news. However, many internet stocks will never recover their former values, and many of those firms are sliding towards their doom. Capital flows simply aren't going to businesses without decent prospects. Quality is key in the current market environment.

What will the market be watching? Inflation indicators are critical; employment cost indicators come out later this week. More corporate earnings reports will be out, most of them good.