A lack of any new negative news out of Europe has the market bouncing a bit better, but the general consensus now is that sooner or later there is going to be some significant problems with the European banks. That isn't stopping market players who are looking for some short-term action from jumping in today but I believe most are renters and not buyers.
The big picture still looks quite problematic to me, but if you are an opportunistic trader then you can't help but try to catch some short-term moves while you wait for things to roll over again. Counter-trend trading can be very profitable but it isn't always easy to find good vehicles to trade -- especially if you are too picky about charts.
These bounces often will run further than you think because many market players just aren't ready for them. The shorts are squeezed and the underinvested bulls have to scramble to find some inventory. That tends to keep the market running longer than what some may think is reasonable.
The biggest problem the bulls face is that you have to worry about overnight exposure when there is still so much uncertainty in Europe. It wouldn't be surprising at all to wake up to a big gap down on some European banking news or a Greek default. The good news is that something like that is already widely anticipated, so it is priced in to some degree. But the news will definitely create another wave of uncertainty as market players wonder what country or bank is next.
The bulls are looking pretty good and they are doing a little squeezing now. But if you have a high level of trust, then you haven't been reading the news. Make sure you have an exit plan in mind. I do not believe this market has seen its lows yet.