The iPath S&P 500 VIX Short-Term Futures ETN (NYSEArca: VXX), which tracks futures contracts on Wall Street’s “fear gauge,” rallied nearly 5% Monday morning as the exchange traded note saw heavy volume of more than 5 million shares in the first half-hour of trading.

The VIX-futures ETN jumped as stocks fell with concerns over Europe’s sovereign-debt woes triggering the global sell-off.

SPDR S&P 500 ETF (NYSEArca: SPY) was down more than 1% while the Dow slipped about 150 points.

ETFs that follow CBOE Volatility Index futures continued to decline last week. For example, iPath S&P 500 VIX Short-Term Futures came into Monday’s session with a 40% year-to-date loss. This suggests investors are complacent and confidence hasn’t been threatened by recent consolidation in stocks.

Still, a 10% rise in the VIX on Monday suggests Europe’s debt crisis is back in the spotlight as a key market worry.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.