Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Ambac Financial (NYSE: ABK) continued yesterday's rally, after Lehman Brothers Holding said it had settled all claims filed by the mortgage insurer's bond unit, Ambac Assurance.

So What: As part of the deal, Ambac Assurance agreed to drop each of its 60 claims, totaling $6.1 billion, against Lehman's bankruptcy estate. And in return, Lehman agreed to drop its claim that Ambac owes it tens of millions of dollars under several disputed derivatives transactions.

Now What: While the settlement has certainly put a charge in Ambac's shares, this Fool would caution investors about jumping in at this particular time. After all, back in March, management stated that it might have to file for bankruptcy if it can't restructure its liabilities by mid-2011. Although investors stand to make huge gains if all of Ambac's rehabbing efforts continue to go positively, there's still too much uncertainty to call it a prudent bet.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.

True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Fool has a disclosure policy.