It is clear that European officials don't want to deal with the sovereign issues right now. There are enough bailouts in place to buy them at least until the end of the Summer before determining the next step. If these sovereign issues could be swept under the rug for now than I believe markets could rally.
Unfortunately, if markets sense that a default is imminent they will not wait until that point before starting to price it in. The market may have dodged a bullet as Greece has no plans to leave the Eurozone. But that does not mean that Friday's news does not turn into the point of recognition for markets that a default is imminent.
This is a very tricky juncture as an investor and trader. It was obvious a year ago that Greece would need to default at some point. However, staying out of the market or even worse, shorting it would not have been a profitable decision. As somebody who anticipated the collapse of the real estate bubble way too early I am aware how long these imbalances can persist.
I believe that if the market could put Europe on the back burner it can probably score a marginal new high by a couple of percent over the next few weeks. After that I would expect a bumpier Summer. I believe the most likely outcome is that the day of reckoning is delayed yet again. But the possibility of a crisis will keep me more conservative than I otherwise might be and have me taking profits on the long side quicker than I otherwise might.