Sunday, May 17, 2015

Congestive Market Failure Visualized

ZH: May 15, 2015
"The ADX, or Average Directional essentially an indicator of the strength (or lack of strength) of the prevailing trend over a specified period, regardless of the trend’s direction. A high number indicates a strongly trending market and a low number reflects a lack of trend. The traditional default look-back period is 14 days so we tend to stick with that. Interestingly, recent readings of the 14-day ADX applied to the S&P 500 have been among the lowest of the last 65 years, indicating an extremely “trendless” market."

5 week ADX with Nasdaq: