Despite a sell off on Monday, traders decided they’d had enough and essentially conducted a huge reversal on Tuesday that sent the Dow Jones Industrial Average back above the 12,000 level and the S&P 500 up to 1241 after a 3% gain.

The rally in equities is a sign that volume and confidence are finally returning to the markets. One broker-dealer at the NYSE called volumes “good,” noting that there was lots of volume in the SPY from overseas traders.

Stocks weren’t the only positive indicator of the day. Yields dropped significantly on European debt, including Italy, Spain and Portugal. Economic data related to housing starts has improved, signaling that the U.S. economy could be on the right path to recovery.

The Chicago Board Options Exchange Volatility Index (VIX) hit its lowest level since August, diving below 23 points. The index is sometimes seen as an indicator of fear and despite an influx of new European state banks borrowing from the European Central Bank, fear is effectively nonexistent.