What a Week: Upbeat Finish

The Fed may ease this summer if there's "more definitive softness in economic growth," Caron adds. But right now the best strategy is to "keep policy on hold unless we see more definitive softness or the economy sustains a shock."

Amid all the angst, the Economic Cycle Research Institute said Friday its Weekly Leading Index increased for the week ended May 4 and now sits at a three-year high on an annualized basis.

"I believe this is still a Goldilocks economy -- only, this Goldilocks has a couple of blemishes, which has made some mistake her for a bear," Anirvan Banerji, director of research for ECRI, commented on RealMoney.com's "Columnist Conversation. "There may be some further fallout from the housing downturn, but I don't believe it will trigger a recession in the foreseeable future. Bottom line, despite pockets of weakness, recession risks remain remote, while inflation pressures are still in an easing trend."

Nevertheless, Banerji's optimism puts him in the minority as skepticism remains high about the economy and the market.

"We're obviously exiting the earnings period and the focus is shifting to the economy and the Fed," Teddy Weisberg, president of Seaport Securities, said Friday in an interview on TheStreet.com TV. "The Fed appears in bit of a box. They're clearly concerned about inflation but all the evidence indicates the economy is slowing. There's not a lot of positive things going on out there. That probably is not going to be the same impetus for as strong a market as we've seen for last three or four weeks."

That said, the "buy the dip" strategy remains a winner until proven otherwise, Weisberg said in the midst of Friday's rebound. "If it's not broke, don't try to fix it."

Indeed, the underlying tone heading into the weekend was back to cautious optimism: Either the economy rebounds or the Fed will ease.

Heads bulls win, tails bears lose.

1 What would best describe your stance heading into the coming week of trading? Bullish Bearish Neutral 2 Which of these sectors do you think is set to move up in the coming week? --Choose One--Aerospace and DefenseAirlinesAutomobilesBeverages and Food ProductsBiotechnologyCommercial BanksComputers and PeripheralsConsumer NondurablesEnergy Equipment & ServicesHMOs and HospitalsHomebuildingInsuranceIntegrated OilInternet, Software ServicesInvestment Bankers and BrokersMediaMultiline RetailPharmaceuticalsPrecious MetalsSemis, Semi EquipmentTelecom EquipmentTobacco and AlcoholWireless CommunicationsUtilities 3 Which of these sectors do you think is set to move down in the coming week? --Choose One--Aerospace and DefenseAirlinesAutomobilesBeverages and Food ProductsBiotechnologyCommercial BanksComputers and PeripheralsConsumer NondurablesEnergy Equipment & ServicesHMOs and HospitalsHomebuildingInsuranceIntegrated OilInternet, Software ServicesInvestment Bankers and BrokersMediaMultiline RetailPharmaceuticalsPrecious MetalsSemis, Semi EquipmentTelecom EquipmentTobacco and AlcoholWireless CommunicationsUtilities View the results without voting