Bulls found fresh legs on Wednesday with support from the FOMC, despite the reluctance of Greece to “play ball” with its creditors, which has been depressing investor sentiment. Everyone seems to agree that the unresolved debt crisis in Europe is the main thing holding back global economic recovery and the snorting stock market bulls. To be sure, the situation in Europe is not good.

The “risk-on” trade seems to be hanging tough as more than a passing fad. Risk-off means that money is flowing into safe havens like U.S. Treasuries and solid currencies like the U.S. dollar and Swiss franc; whereas risk-on means that money is flowing into more speculative assets like equities, commodities, emerging markets, and higher yielding currencies.

Stocks are maintaining their bullish sentiment for the New Year. The proverbial “wall of worry” remains high and intimidating, but bulls traditionally prefer it this way. It makes the less optimistic investors keep a store of cash, and it keeps the bears pumping money into short positions—both of which can provide fresh fuel for stocks when idle cash gets put to work and the bears start covering their shorts.

After closing 2011 at exactly the same level it closed out 2010, the S&P 500 came blasting out of the gate with guns a-blazing on Tuesday to celebrate the New Year. It was a welcome sight to scores of nervous investors.

Bulls are trying mightily to ensure the Santa rally holds into year-end and close the year in the positive, as all eyes remain on Europe.

Like the nice employer who never fails to pay a Christmas bonus every year, Santa seems bound and determined to give bulls the year-end rally they have come to expect. But bears aren’t going away quietly—although bulls got some unintended help from the bears with Tuesday’s short-covering-fueled rally.

After a nice pop last Friday and an aborted attempt to get it going again on Tuesday, stocks were down 3% for the week through Wednesday. Among the ten U.S. sector iShares, Energy (IYE) and Basic Materials (IYM) have led the market down this week. The “risk-off” movement has sent investors into the safety of the dollar and Treasuries at the expense of stocks and commodities.

U.S. stocks are raring to rally. Earnings reports have been quite good. Consumers are spending despite stubbornly high unemployment. Interest rates are at rock bottom, which is good for borrowing and also makes stock yields relatively attractive. So what’s the problem? Oh, just the usual—fear of a European debt meltdown triggering a global recession.