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To: dr. z who wrote (6642)	3/27/2001 7:39:53 PM
From: OpusX	Respond to of 8925

ADX does not measure the direction of price, it attempts to measure the trendiness of price, in other words it measures the absolute strength of the trend (or lack of) not the direction. OpusX

To: dr. z who wrote (6642)	3/27/2001 8:11:27 PM
From: Michael Watkins	Read Replies (1) \| Respond to of 8925

Dr. Z, In the example you are referring to, ADX is not 'at variance' at all with the price action. Its important to remember that ADX is a trend strength indicator, it is not a trend direction indicator. So in this example, ADX is rising sharply, and when we see ADX rising sharply from relative lows, we expect to see price action confirming that a new trend has emerged. ottographs.com As you can see in the above updated swing chart, ADX declined from mid January through to the end of Feb as price climbed and then churned in an ever tightening range. As Teresa has pointed out in the past here, ADX doesn't measure whether something is moving up or down. Many indicators are like that, ADX requires a little more thinking. Climbing ADX means the trend is strengthening, and remember that trends can be up and down! Declining ADX means the trend is weakening. Frequently we can use the decline from a peak ADX value to help identify where a consolidation pattern begins and ends, much as I have done in the above posted example. I hope this helps, Mike

To: dr. z who wrote (6642)	4/3/2001 12:12:58 AM
From: Teresa Lo	Respond to of 8925

RE: ADX and PFE, as an example. I guess it is my fault for confusing you. That red line is NOT a trend line, but rather, it is a DownSwing. If you wish to know more about Swing Charts, there is more information here at ottographs.com The ADX is rising as the DownSwing intensifies, confirming that the move is directional (big net movement) to the downside. From TradeStation: "The ADX measures the strength of a prevailing trend as well as whether movement exists in the market. A low ADX value (generally less than 20) can indicate a non-trending market with low volatility whereas a cross above 20 may signal the start of a trend (either up or down). If the ADX is over 40 and begins to fall, it can signal a slowdown of a current trend. This indicator can also be used to identify non-trending markets, or a deterioration of an ongoing trend. Although market direction is important in its calculation, the ADX is not a directional indicator." Teresa