Whither goes Volatility from here?

Having only learnt of this variable at the onset of the turmoil in July 2007, I have a general notion that it increases dramatically when the price of risky assets fall, and vice-versa.

After a brief spike from 17 to almost 30 in the most recent stockmarket correction, it has now dropped back to around 18.30.






Looking at the chart above, it seems that the CBOE Volatility Index has reached what is a relatively strong support line(in yellow).


Also, notice the divergence(blue and red arrows) between price and the MACD indicator.

This chart suggests strongly that a sense of complacency has returned to the markets and that we might just see a spike up in Volatility soon.