Well, what often happens with these kind of things (a rather hefty decline in the face of seemingly huge problems, in particular after a long rally which has lasted two years, or the last leg almost half a year and has had no large pullbacks really) is that the market will continue to sort out opportunistic longs such as yourself.
A whole lot of hysterical buyers from the "Gadaffi accepts ceasefire" are trapped again. They must have been quite optimistic at that time, yet now people are still shooting at each other. Just look at where the bodies are buried. From the previous week's action, those who sold the bottom were obviously getting crushed (lots of volume down there) and there wasn't a lot of volume hanging directly above that bottom, so you get a bounce.
Furthermore, Fukushima situation is in no way under control and is also not what I would label "improving". Then we have some more potential problems which can come on the radar, Bahrain being a biggy.
Then we have the whole budget crisis thing which can pop into the minds of the traders also.
I'm not sure if the indices will go far below the previous low, but I think there is a good chance. Greed is punished and the greed trade at this particular hour is definitely to get long and hope and pray another huge rally is going to make you rich.
Don't buy when prices and/or news continue to surprise to the downside (i.e. this dip is going a lot harder and faster than what would be expected from a "normal" dip, hence it could likely not result in an immediate huge bounce).
Edit: Also, if the "Hysterical cease-fire buyers" don't get punished in the first two trading days this week, I expect the market will continue higher because as I said there are a lot of guys trapped at the lower prices (I expect there will be major support there also unless fundamentals deteriorate again), so there is a reasonable chance of a further bounce.
My point is mainly it's about 40/60 now with odds favoring further declines. Huge dip, reasonably oversold though not quite there yet. Could ruin all the panic sellers but it could also make a lower low to really shake out the bulls.
