The trend is clearly broken

The uptrend in the major indicies over the past six or seven months has clearly been broken. Here is a chart of the S&P 500 with my retrospective scribble on the chart, indicating the prevailing trend:

Note that volatility has increased considerably:

VIX is not predictive; however, it does say that market participants have been spooked to pricing in more volatility in the future. The question is whether they are spooked enough – my gut instinct says we may get a sucker rally here or there, but it is more likely than not that the prevailing trend will either be choppy or down – not exactly the type of environment for a buy and hold investor.

Playing conservatively is likely the better option at this point, just as it has been for the past few months.