“But the conventional wisdom is that they’d rather bail out the euro than not have a euro at all. Hence the rallies and the market’s belief that there probably won’t be a massive run on the sovereigns and banks,” Lee wrote. “The irony is that as the market becomes more complacent, the political will to engage in painful reform ebbs, sowing the seeds for the next cycle of panic. The final resolution of the crisis—ECB involvement—likely won’t occur without a bout of extreme market pressure.”

A momentum-based strategy is one approach to this market.

“A simple 200-day-moving-average strategy applied to a broad European exchange-traded fund like Vanguard Europe ETF would have avoided the worst of 2010 summer’s Eurozone turmoil, profited from much of the rise, and sold out before the worst of the recent drawdowns,” Lee wrote.

Vanguard Europe ETF

iShares S&P Europe 350