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 mortgage insurer Radian Group (NYSE: RDN) jumped more than 17% in intraday trading as investors cheered the company's earnings report.

So what: Yes, Radian did post a surprise profit for the third quarter, but hopefully that's not what everyone is jumping for joy over. The company's profit was not driven by greatly improved overall operations as much of today's news coverage would have you believe. Instead, it was due to a $230 million change in derivative valuations. Pull that out, and you've got another unprofitable quarter for Radian. In fact, the company breaks out results by operating segment, and its mortgage insurance arm posted a loss for the quarter, while it was the run-off financial guarantee business that had the derivative bump and the bottom-line profit.

Now what: While the profit itself may not be reason to be overly excited about Radian's quarter, the trends in the business are encouraging. Loss provisions were down 15% from last year, the loss from the mortgage insurance arm was smaller than last year, and even without the derivative gain the company's loss would have been less than analyst estimates. Default rates were down slightly from last quarter, though defaults on the company's insured prime loans -- the majority of its insured loans -- were still up from last year. Fellow insurers PMI Group (NYSE: PMI), MGIC Investment (NYSE: MTG), and Ambac Financial (NYSE: ABK) were all rallying on the news, but it still looks like this troubled sector has plenty of work ahead.

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Fool contributor Matt Koppenheffer does not own shares of any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or on his RSS feed. The Fool's disclosure policy assures you no Wookiees were harmed in the making of this article.