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It's only natural that stocks should test the downside on the heels of one of the biggest rallies the market has ever seen.

Sure, it might seem odd to think of yesterday's

action as a rally. But there are few better names for a 500-point afternoon surge by the

Nasdaq Composite Index

, and this morning technology stocks are set to give some of those points back. At 9:05 a.m. EDT, the

Nasdaq 100

futures were down 110 points. That's the negative price limit on

Globex

, so there's no telling how poorly large-cap tech may open.

"We had a nice bounce" yesterday, said Rob Cohen, co-head of listed trading at

Credit Suisse First Boston

. "But the recovery was far too fast, and the damage done was much more endemic than shown by the closing of the averages. People should be sobered and concerned."

The broader market looks weak as well. The

S&P 500 futures

were lately off 18, about 10 points below fair value.

An early tech selloff wouldn't be an altogether bad thing. If, as is becoming generally accepted, much of the Nasdaq's froth has come from weak buying -- buying on margin, buying on short-term momentum -- it might be healthy to squeeze more weakness out of the market.

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Still, the scale of the market's recent movements is getting increasingly worrisome.

"High volatility is not an inherently bullish sign for the marketplace," Cohen said. "The best thing that could possibly happen is just a stabilization, to let the market cool down a little. More volatility could shake investors' confidence in the underlying soundness of the Wall Street community."

Meanwhile, technical analysts, those folks who study charts for lines of support and resistance, are split on whether yesterday's astonishing reversal constitutes a true

bottom. The market hit its intraday lows yesterday with such jarring force that it's tough to surmise exactly

what was happening around midsession. But even the optimists ready to start deploying cash are stressing caution.

"You can't really know," concedes John Bollinger, president of

EquityTrader.com

. "In 1998, we knew for a certainty because the

Fed

was accommodative, and you don't get bear markets in positive monetary environment. This time, we're in a restrictive monetary environment. So we can have a bear market, and it will be very important to watch what happens in the coming weeks."

The market may be able to shed some of its anxiety as it moves out of its current news vacuum and into another strong earnings season. But in the meantime, there's Web portal

Yahoo!

(YHOO)

, which will release its first-quarter numbers after the close today.

The bond market was extending yesterday's advance, with the 10-year note up 16 ticks to 105 1/32 and yielding 5.821%. No major economic data are in the pipeline, though at 1:30 p.m. Fed Chairman

Alan Greenspan

is scheduled to speak on the well-worn topic of "Technology and the Economy."

Stocks were getting pummeled in Europe in afternoon trading. In Paris, the

CAC

was down 283.62, or 4.6 %, to 5938.32, while Frankfurt's

Xetra Dax

was off 285.26, or 3.8%, to 7237.54.

London has thus far managed to escape the downdraft, but not for the best of reasons. Technical

problems are delaying the open of the

London Stock Exchange

. But the

FTSE

futures were lately down 143 to 6,350, signaling a very bad trend for stocks when they finally start trading.

The euro was trading up at $0.9691.

Asian markets took their

lumps from the overnight Nasdaq lunacy, with the biggest losses hitting Hong Kong, which had some catching up to do after yesterday's national holiday. Fund managers there helped send the

Hang Seng

down 574.49 points, or 3.4%, to 16,318.44. Many large mutual funds were reportedly shifting out of tech stocks and into blue-chips.

In Tokyo, a rally in blue-chips ran counter to the continued selling in technology stocks, allowing the market to largely stave off panic-selling. The

Nikkei

fell 132.16 points to 20,462.77.

The dollar rose slightly in lethargic trading, moving up to 105.39 yen. The greenback was lately sitting at 104.81 yen.

Meanwhile, the Japanese parliament officially

elected

Yoshiro Mori

as the country's new prime minister to succeed

Keizo Obuchi

, who remains in a coma after suffering a stroke on Sunday.

For a look at stocks in the preopen news, see Stocks to Watch, published separately.