It is important to remember that valuations are currently not very demanding of stocks. The biggest mistake investors make is that when the news is bad they ignore valuation and keep selling regardless of price. We see the opposite when the news is good. Until the EU allows a Lehman like event to happen I am working under the assumption that heavy bouts of pessimism could be bought.
The very short term outlook for stocks has not changed since last week. There has been little progress in Europe but the market remains oversold. The bulls still have a slight advantage and we are likely to see a chop higher for a few more days.