Since August 31st we’ve essentially gone nowhere by my indicators. When viewing a 30 minute chart of the Nasdaq, you can see very clearly that the ADX is in a tight range, getting rejected when either the +D1 or -D1 tries to go above the range of 40. Essentially every time the market tries to establish a trend, it gets slapped back down into the range, not allowing any momentum to build. This type of action won’t go on for much longer, and the more time it remains in the range, the bigger the pop (no way to know which direction yet) it will be.
When this type of market movement is going on, it’s important not to overtrade, and wait patiently for the market to establish a clear trend. Look for other clues, such as the lower highs, and lower lows to provide hints as to which way the market may break. It’s quite likely that when the ADX perks up out of this mosh pit it’s stuck in, the action will be fast and furious, and those that weren’t lulled to sleep will cash in.
