Bearish case: Declining 50 d MA in an overall bear market, lots of structural damage in the economy, reversion toward the mean after the strongest month in 18 years.
Bullish case: SPX trading above 50 dMA, strong upward price movement on increasing volume, bullish MACD with healthy divergences. Cash on the sidelines and high short-interest will act as a bid on the market.
I would add a couple more things to the bull case, namely the ability of markets to correct through intervention by government and central banks to counteract unemployment trends and tight credit. These are huge factors in the global economy and the macroeconomic improvement will certainly be dependent on some co-ordiantion of these institutions which is no small feat.
The good news on that front is that the US is the 800 lb gorilla and even ass-backward policies in the rest of the world can be mitigated by thoughtful intervention here. Our future is in our hands, and despite the broadsides the administration is recieving by the opposition party, prudent Keynesian stimulus and investment in education and infrastructure will win out in the end.
Also, while the EU may not sign on to such massive spending and US conservative critics will decry that we are doing too much, we have to remember that Europe already has huge safety nets with more generous unemployment benefits and universal health care, so we need to spend more at this juncture. Yes, our deficits will be higher, but that's because half our budget is going to unproductive military interventions. To neglect the necessary spending now would cripple us further in developing our human resources for the next generation.
Conclusion: The US economy is at a nadir but the path we are on is healthy. The market as a leading indicator will do what markets do as the sausage maker of government debates regulation, spending and taxes, but the longer term trend looks positive.