Well, is the sell in May crowd through? It would seem that if the mass of selling sentiment peaked in May, then perhaps the bounce that we are seeing now is the logical consequence. Everyone who wanted to sell did so, and now they and others are potential buyers. Isn't that how the reasoning goes?
IMO the longer the European issues go on, the more the market will get desensitized to the related headlines. If the U.S. can just keep plugging along with anemic growth of around 2% or a little better, we will continue to be the out performer and will attract a continued inflow of cash. With such lofty prices (paltry yields) of treasuries, it would seem that some of that inflow will be taking on risk in order to generate a little income.
To me those dynamics will keep our indices somewhat range bound, but without excess panic and without peaks and troughs being extreme. As posted the other day, I would expect highs and lows to stay within 10-15% of DOW 12K.