We opened the week in the tech doldrums and we closed with a crushing stomp to the finish line. Is tech really back, or is the market just toying with everyone?

The turning point this past week came when

IBM

(IBM) - Get Report

and

Dell

(DELL) - Get Report

announced their plans to work together. That hit the tech bears square across the face. Then

Intel

(INTC) - Get Report

piled on with its plans to acquire

Level One

(LEVL) - Get Report

, arresting what had become a horrific dive. By Friday afternoon the tech generals were marching decisively higher and even the big, lumbering

Dow Jones Industrial Average

was beginning to look like its old rallying self.

A few things are happening, some of which argue in favor of another turn higher. But the initial part of this most recent burst of excitement probably comes from the same old source. Overly eager short-sellers, caught on the wrong side of the news on Wednesday, have scrambled to get out of the way of this latest surge.

But there is more substance to this recent surge than simple short-covering. A good deal of the rising bearishness in the stock market stemmed from the ailing bond market. Bond traders, concerned about the strength of fourth-quarter growth and the possibility of resurgent inflation, had pushed long-term interest rates back within sight of 6%.

A big piece of this extended bull market has been quiescent inflation readings. Any possibility that the inflation leg might crumble is enough to make even hardy bulls nervous. But what's strange is that all this inflation fear coincides with growing worldwide concern about deflationary pressures. Given the jobs report Friday morning, which included another tepid reading on prices, it is likely that the bond market's brief flirtation with an inflation scenario is just about over.

With the inflation situation once again under control, the stock bulls will be able to jack the bears around a little bit. Moreover, the jobs report offers another piece of evidence that the economy is growing while inflation remains in check. It is the robust recipe that has helped drive the stock market to awesome gains in the past four years.

Still, before too long, we will once again have to focus on earnings. Corporate profits have edged higher in the past couple of quarters, but not in a powerful fashion. Concern about slackening capital-spending programs, which are heavy in technology, simmers just below the surface of the recent surge.

By Monday we will be smiling about the resurgent market, but it won't take long to get to the next issue: earnings. We are in the final weeks of a very important first quarter, and the earnings pace, while moving in the right direction, has not been as robust as bulls would like to see. A surprisingly strong earnings quarter would help send the stock market cruising closer to Dow 10,000.

Media Notes:

Expect more stories on Monday talking about how crazy the stock market has become. This, I would like to remind everyone, has been a theme in stock market coverage for the past two years. One day they'll get it right ...

Tech bottom coincided nicely with the Wednesday

New York Times

story declaring that tech stocks were in a correction. Using that great logic -- that all news stories are contrarian -- now is the time to start thinking hard about energy stocks. The

Economist

has a big, splashy story describing the current oil glut this week. The one caveat: The

Economist

points out that it correctly forecast that rising oil prices would not last back in the late 1970s ...

TSC Notes:

In case you've been sleeping, some great stuff this week, especially from that pesky mutual funds team. How about that

Amerindo

story? Check that one out if you haven't. Also, Alex Berenson's

UPN

package is something you should go back and read in case you missed it. See you next week!