If the market declines and the vix doesnt move higher it signals people are buying the dips rather than getting fearful.  The marketmakers will take the market down to the point where people get fearful.  To me the vix not spiking today signals we are going to have a few more nasty days real soon, and they wont stop until the weak hands get fearful.

puma,

I was looking at this earlier.  I think the one implication is that people are less "fearful", right, but then I but my skeptic hat on and I think there could have been some lightening of positions as well as more aggressive hedging on the recent rebound.

I couldn't frankly say for sure but I am leaning more to the latter.  The interesting thing is that either could ultimately have the same effect because if the selling happened or the positions are hedged then people are less "fearful" during the decline.