Crash

 Known for obvious reasons as 'the fear index', a drop in the VIX may be a sign of investor overconfidence, while a rapid rise in the VIX could be one of the first indications that a crash is taking place, triggering investors to exit positions en masse.

Generally speaking, crashes usually occur under the following conditions:

a prolonged period of rising stock prices (a bull market) and excessive economic optimism, 

a market where price–earnings ratios exceed long-term averages, and 

extensive use of margin debt and 

leverage by market participants.