Again, the markets just don't seem to be that concerned about news from Cyprus. Or, perhaps they are, but there's great positive news from somewhere else. Or maybe it's Thursday and that's when people do whatever. Yesterday, the Fed was probably "responsible" for any market bad news. Market reporting is "post hoc ergo propter hoc" 100% of the time.
If you believe at all in the EMH, little events like Cyprus are priced in at announcement. If they represent a huge systemic risk, that should be represented by the market dropping. If they do not, the market will continue to appear noisy and long-term trends will dictate the results.
The EMH doesn't predict that Citigroup would have a sudden sell-off back in 2011. But it does seem that prices before were pretty much accurate based on prices after. If it was so obvious, though, that Citi would rebound, the drop wouldn't have happened.
But, you know, perhaps Cyprus is a tipping point like Lehman. In that case, when are you going to buy?
I do believe it is possible to outsmart the market some of the time. But I think that taking the biggest economic news story on Monday and thinking it's going to lend itself to an easy "buy/sell" answer is probably wishful thinking.