Nations, whose firm runs an index that gauges expectations of extreme price moves, notes "the cost of insuring against a massive move down, a 'tail event' that would be a drop of more than three standard deviations, is down 60 percent from its high earlier this month."  Tony Dwyer, the famously bullish chief equity strategist at Canaccord Genuity, said the market's path clearly points higher—even after stocks have quickly soared in what feels like a sigh of relief.  "That was the nasty correction, but what the rebound shows is that's just what it was: a correction," he told CNBC. "I would expect a bit of profit-taking, but earnings are good, market fundamentals are good, credit's okay, and we're pretty bullish into the end of the year."  After a massive week for earnings, America's corporate report card is indeed coming in nicely. Out of the 205 S&P 500 companies that have reported, 70 percent of the third-quarter earnings have come in above estimates, and 59 percent have beaten on the revenue side, according to Thomson Reuters.  Perhaps most crucially, Caterpillar crushed earnings estimates and boosted guidance, assuaging concerns of what a tough global economic picture means for U.S. corporations.  Read MoreCaterpillar blows doors off analyst estimates  Of course, not everyone is so sanguine about the rest of the year.  "Short-term, we think this is a bipolar market," said trader Jeff Kilburg. "We do expect to see a pullback next week, as these markets continue to be like scissors."  For Equity Armor's Stutland, wherever the market trades over the next couple of months, buying options rather than the stocks themselves (which should drive the VIX higher, given that the index measures the prices of S&P 500 options) will become the more salient strategy.  "With the move down and back up in these last two weeks, traders are going to want to own calls or puts to make directional bets, rather than buying or selling the underlying," he said.  Stutland added: "to me, the rise in volatility is not due to fear over the economy. There's simply been a realization that volatility should trade at more normal levels."
The markets have just breathed a huge sigh of relief. But that doesn't mean the good-and-boring old days are coming back.