Vix is a gauge of derivative options trading so I would say that it is reflective of many traders covering a large drop that may or may not eventuate, however some of these events can become self-fulfilling prophecies. Equity traders use the VIX as a guide and start dumping etc
I would say that some sound fundamental data would be needed to stop any rot, US GDP growth yesterday was a good start so it will have to be followed up with some more supporting data that indicates it just isn't stimulus spending but rather along the lines of the economy looking as though it can start to support itself.
