One of the symptoms of the recent market volatility has been to force a lot of money to the sidelines. And while traders often have gone into the office not knowing which way the market was going to go lately, that was not the case Thursday. A combination of those two factors set things up for the rally in technology.

The

Nasdaq

quickly bounced back from a triple-digit deficit and closed up 143.96, or 4%, at 3774.05.

TheStreet.com Internet Sector

index finished up 53.08, or 6.6%, at 856.97, after trading as low as 772.72.

Sam Tobias, a trader with the

Circle T Hedge Fund

, said the market already had discounted strong numbers, particularly strong inflation numbers, after the recent

Consumer Price Index

, and was better-positioned after yesterday's selloff.

And while Thursday's data had more pundits talking about the Federal Reserve raising interest rates by 50 basis points next month, Tobias said he still saw the Fed on course for another 25-basis-point tightening in May, and another 25 in June, then going to the sidelines ahead of the presidential election. He said one of the Fed's concerns, the asset bubble, has come down significantly, while it will need to wait to see if its interest rate hikes are going to slow the economy.

"Am I surprised it's up 125? Sure," he said. "But you already knew from the CPI last week that there was lots of evidence that inflation was picking up, so anyone that was really surprised by that number has not been watching the economy."

Just as important, Tobias said there was a lot of cash on the sidelines; the market had sold off Wednesday, and when traders knew the market was going to open sharply lower, they took advantage of the selloff to get back in. Short covering likely contributed to the rebound, particularly after traders saw the economic numbers.

Tobias said there were a couple of other positive factors at work as well, including

Microsoft

(MSFT) - Get Report

stabilizing after its sharp selloff on Monday. Tobias said Microsoft was the first stock to lead the tech sector recovery today. Also, he said, when the

AT&T Wireless Group

(AWE)

IPO was not postponed, it gave people some confidence as well.

Finally, and perhaps as importantly, Tobias said that earnings have been "phenomenal." He said that for the short term it was "all clear" to buy stock.

Bears have one more bullet but it looks to be small-caliber. A close above last week's high close (3793) still may be something

technicians are looking for so the recovery can continue. Failure could set up a test of the recent lows and beyond.

As Tobias mentioned above, solid earnings have been seen throughout the technology sector and helped move many Internet stocks today.

Network Solutions

(NSOL)

closed up 20 9/16, or 18%, at 135 15/16;

VerticalNet

(VERT)

finished up 5 7/16, or 12%, at 51 7/16;

Broadvision

(BVSN) - Get Report

climbed 7 5/8, or 24%, to 40;

InfoSpace

(INSP) - Get Report

added 7 15/16, or 12.4%, to 72; and

Software.com

(SWCM)

pushed up 8, or 12%, at 75.

Amazon.com

(AMZN) - Get Report

closed down 5/8, or 1.2%, to 52 7/8.

TSC

's James Cramer provided an

opinion of Amazon recently.