In the roller-coaster ride that is the stock market this week, today counts as a pretty great day. The overall market closed up more than 4 percent, with the Dow Jones industrial average climbing 423 points, the Nasdaq 111 points, and the S&P 500 51 points. The New York Times chalks the surge up to "bargain-hunting investors, positive economic data and some easing of concerns over Europe's finances." The market got off to a strong start this morning after the Labor Department announced that the number of people seeking unemployment benefits had dropped below 400,000 for the first time in four months. Positive earnings at Cisco and other companies further fueled the rally.

Yet even with the impressive showing--and the good sign that the traders we're seeing in news reports are happy, not sad--there's reason to remain cautious. The market, for starters, is very volatile, with stocks oscillating between steep gains and losses in a way not seen since March 2009, according to the Times. CNBC also points out that the Dow and S&P are still down more than two percent for the week.

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Uri Friedman