Without clarity from the Europeans, any rally here should be taken with a grain of salt. (Without question I see awesome opportunities here, but also see continued volatility with strong EU action.)
The market may very well rally to the 5 or 14SMA on the daily, then find resistance.
The only thing that will ease the volatility and give equity markets a sustained and stable move from current levels is if clarity from the EU is given. IMO, I would like to see something drastic, maybe devalue the Euro or get the Euro-bond in place by the end of the year. At this point, I will take anything, even if it gives the markets a short-term shock, to get this crap out of the way.
Because I am expecting some level of 'shock' from the EU action that needs to get done, I will always have a small level of SPY protection in play.