THE WEEK AHEAD: Where do we go from here?

When traders return from a three-day holiday weekend next week, they'll likely spend little time rejoicing in Friday's broad-based rally. With a scarcity of news due out, expect the market to resume its schizophrenic behavior.

On the bright side, August payroll data that came in lower than expected, easing concerns about further interest rate increases by the Federal Reserve. Some analysts said the rally would continue into next week, but markets would remain vulnerable to any negative economic news.

"I think this is a technical rally," said Ricky Harrington, technical analyst and senior vice president at Wachovia Securities. "I think this is a market that is very reactive."

The U.S. Labor Department said nonfarm payrolls employment increased by 124,000 in August with the unemployment rate falling to 4.2 percent and wages rising 0.2 percent.

"It appears these numbers are a preliminary, solid sign the economy may be in the process of slowing. That is precisely what the credit markets wanted and what the Fed wanted," said Hugh Johnson, chief investment officer at First Albany Corp.

Economists polled by Reuters, on average, expected 220,000 new jobs in August, with a 0.4 percent increase in average hourly wages. The unemployment rate matched expectations.

For the week the Dow closed off only 12 points to 11,078.45 after some rocky trading while the Nasdaq rose 84 points to finish at 2,842.58.

Wall Street will being paying a lot of attention to speeches from no less than three Federal Reserve Board Governors this week, hoping to glean some insight in the future of interest rates.

On the earnings front, National Semiconductor Corp. (NYSE: NSM) is one of a handful of significant technology companies to report next week.

First Call consensus expects it to lose 13 cents a share in the quarter.

National posted a loss of 24 cents a share in its fourth quarter. Company officials are expecting total sales to improve 2 percent to 4 percent year-over-year.