...for both the explanation and the kind words! :-)

I had always thought of the VIX dropping during a correction as a sign of complacency -- kind of contrarian.

But your post adds a whole new twist to it, because it could ALSO mean that options aren't being used to protect long positions... if those long positions THEMSELVES are being unloaded.

It seems to me that there might be a way to parse the difference between low VIX optimism (i.e. few options but plenty of long positions) versus low VIX pessimism (i.e. few options NEEDED because the long positions are being unloaded).

If a correction has a low VIX AND low market volume, that might be more optimistic for a bounce than a low VIX and high market volume because that would mean they aren't even bothering to keep the long positions and therefore don't have anything left they need to protect.