VIX

VIX is a weighted average of the out-of-the-money SPX options in the first two expirations, and adjusted to simulate the volatility of an option with 30 days to expiration.  It is never wrong since it is a calculation using actual bid/ask prices of these SPX options. 

If the VIX is going up, then the out-of-the-money options in the calculation are rising from trader’s accumulation (demand); likewise, the VIX drops from trader’s distribution (supply).

If the market is moving lower, but traders are not bidding up the out-of-the-money options (VIX doesn’t rise), then traders are already hedged, or are less leveraged, and the extent of a sell-off is not perceived as intimidating to them.

Use the VIX to complement your trading strategies rather than to predict market direction.  Compare the change to the past few weeks to gauge the overall fear or complacency in the market.  If the VIX is rising above the past trend, then uncertainty is increasing in the market over what may happen in the near term future; likewise, if the VIX is falling below the past trend, then complacency is increasing and option premiums are relatively low.