The Dow was up nearly 26% in 2013, and in that context 3.5% in a couple of days isn't a big deal. Equity markets tend to drop faster than they rise. We had a similar drop back in June, and the market chugged higher. With the VIX as low as it was, it suggested funds hadn't been buying options as a hedge. So, the market sells off a little more than people expect, and it creates a mini panic because people get caught without protection. The VIX spiked up as it normally does as those same people scramble to buy options. I'd been getting killed on my short positions over the past few months, and yesterday helped out a lot. I'd love to see it higher, but volatility is finally getting back to the bottom of the range where you get rewarded for taking risk, whether you're bullish or bearish.