NEW YORK (CNN/Money) - The market was hanging in there as the week came to a close, giving back only a bit of Wednesday's 489 point Dow rally on Thursday and even managing a slight gain on Friday.

But what traders really want to see is some follow-through in the week ahead. That would be a sign that investors feel the all-clear signal has sounded and that it's safe to go in and buy stocks again. The signs are good: Stocks closed on their highs of the day Friday, an indication that investors were, for the first time in a while, going into the weekend feeling optimistic.

"I've gotta be honest, I've really turned much more bullish," said Putnam Lovell head of equities Jack Baker. "I think the bottom has been put in place and it's going to hold for a while."

The risk, however, is that just as bargain-hunters come in to nibble, yet another accounting worry will shudder through the market. Sentiment remains fragile and distrust of companies' accounting methods is running high.

"Anything coming out of left field could ruin the scenario," said Baker.

Plenty of fundamental investors think that stocks have become incredibly cheap. The Fed model -- a popular valuation tool that compares stock prices, earnings estimates and bond yields -- indicates the benchmark S&P 500 is 35 percent below where it should be. The discount is deep enough, the optimists say, that even if earnings estimates prove too fluffy, stocks still look reasonably priced.

"We could be set up for a pretty substantial rally because valuations have come down to such an extreme level," said Trilogy Advisors chief investment officer Bill Sterling. "Equities look pretty cheap compared to bonds on a relative basis you'd expect them to do well over the next couple of years -- but the next couple of weeks could be another matter."

The second-quarter earnings period is mostly much over. A few big companies -- like Verizon, Aetna and Disney -- will be reporting in the week ahead, but investors' focus will be on the economy. Economists will be sifting through a raft of fresh data to see how things held up in the face of the stock market's downdraft. (See more on the potential economic threat posed by the weak stock market.)

"We'll get the first readings for what the economy did in July in the face of this firestorm," said Salomon Smith Barney economist Chris Wiegand.

Key numbers The week's big economic reports Date  Event  Expectation  Previous  Jul 30  Consumer Confidence  102.2  106.4  July 31  GDP  2.3%  6.1%  July 31  Chicago PMI  56.5  58.2  Aug 1  Auto Sales  6.4 million  5.8 million  Aug 1  Truck Sales  8.4 million  7.3 million  Aug 1  Weekly claims  NA  362 thousand  Aug 1  Construction Spending  0.2%  -0.7%  Aug 1  ISM Index  55.0  56.2  Aug 2  Nonfarm Payrolls  55 thousand  36 thousand  Aug 2  Unemployment Rate  5.9%  5.9%   Source:  Briefing.com

The Conference Board's consumer confidence number comes out on Tuesday, but Wiegand is really interested in seeing Thursday's July car and truck sales.

Anecdotally, says Wiegand, auto sales -- and the consumer -- are doing just fine. Fresh incentives from the automakers had people rushing to dealerships. Whether the generous financing ultimately will do the automakers any good is open to debate, but if sales really were strong it could feed through to the broad manufacturing sector, much of which services the auto sector. With inventories low across the board, manufacturers will have to step up production, buying more commodities, paying workers more and giving the overall economy a nice boost.

The other early take on July, Thursday's purchasing managers' report from the Institute of Supply Management, will be followed closely by the market. A key read on the manufacturers, many investors consider it an early indicator on the economy.

The potential problem, said Lehman Brothers chief global economist John Llewellyn, is that many people, including company CEO's, think the stock market is this incredible predictive tool, and that when it turns down it's an indication of coming economic weakness. Whether that's true or not, it can be self-fulfilling. "There's always the risk the market can pull the fundamentals toward it rather than the other way around," said Llewellyn.

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The other big economic reports of the week are of less interest to economists than they may be to traders. Economists won't pay much attention to the second-quarter gross domestic product report on Wednesday. (They call it a rear-view number, telling us what things used to be like rather than what they are like now.)

But it may still jolt the market. While economists think GDP grew 2.3 percent, their estimates could be wildly off this time around. The Bureau of Economic Analysis is revising past GDP reports, and without knowing what those revisions will look like it's hard for economists to calculate second-quarter GDP. Furthermore, points out James Padinha, economist at Arnhold and S. Bleichroeder, this first take of GDP relies on assumptions about how the economy acted in the final month of the quarter. We all know what can happen when you assume.

The last big number of the week will be the July jobs report on Friday. While normally the major report of the month, it may play second fiddle this time around. The reason: Any damage to the economy due to recent drop in stock prices wouldn't have affected the employment situation yet.

(An earlier version of this story erroneously referred to last week as the first week in ten that the Dow had advanced. The Dow last advanced in the first week of July.)