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Directional Movement Index (DMI)

Description
The Directional Movement Index (DMI) assists in determining if a security is trending and attempts to measure the strength of the trend.
The DMI disregards the direction of the security. It only attempts to determine if there is a trend and that trends strength.

The indicator is made up of four indicator lines:

1. Positive Directional Indicator (+DMI) shows the difference between today’s high price and yesterday’s high price.
These values are then added up from the past 14 periods and then plotted.

2. Negative Directional Indicator (–DMI) shows the difference between today’s low price and yesterday’s low price.
These values are then summed up from the past 14 periods and plotted.

3. Average Directional Movement Index (ADX). ADX is a smoothing of the DX.

4. Average Directional Movement Index Rating (ADXR) is a simple average of today’s ADX value and the ADX from 14 periods ago.


How this indicator works:

High and rising levels of the ADX and ADXR indicate a strong trend, either up or down, signifying a trend following system may be appropriate.
Typically if the ADX is above 25 it indicates a strong trend.

Low and falling levels of the ADX and ADXR indicate a trendless market.
Typically if the ADX is below 20 it indicates a trendless market.

A buy signal is given when DMI+ crosses above DMI-. A sell signal is given when DMI- crosses above DMI+.
The ADX and ADXR lines are then used to measure the strength of these signals.

Trend Indicator(DMI):   Appropiate   Not Appropiate     Neutral      DMI(Buy)   DMI(Sell)
High & Rising: Strong Trend NOT Strong
Low & Falling: Trendless NOT Trendless
High or Low: > 25 < 20
Rising or Falling: Rising Falling Plus>Minus Minus>Plus


Directional Movement Index    RSP        3/1/2019       
Trend Indicator(DMI): Level: Rising or Falling: Status ==> High & Rising: Low & Falling: Strength(Signal):
ADX(14w) 26.1 FALLING ==> Not Strong Not Trendless Neutral
ADXR(14w) 26.1 FALLING ==> Not Strong Not Trendless Neutral
Plus+(14w) 27.3
Minus-(14w) 25.4
Signal(DMI Crossover) 2.0 ==> Positive(Buy)


Buy or Sell  LookBack  BEARish  #Signals    CAGR     CAGR   CAGR
.SPX (Yr) /Yr /Yr Bullish BEARish B&H
Weekly(14w)
14.2 21.3 3.2 5.8% 0.2% 6.1%
Monthly(4m) 46.2 4.3 1.9 7.3% -0.2% 7.1%



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  Trend Indicator(DMI):      Appropiate     Not Appropiate       Neutral        DMI(Buy)       DMI(Sell)
High & Rising: Strong Trend NOT Strong
Low & Falling: Trendless NOT Trendless
High or Low: > 25 < 20
Rising or Falling: Rising Falling
Plus+ or Minus- Plus>Minus Minus>Plus

Directional Movement Index RSP 3/8/2019
Trend Indicator(DMI): Level: Rising or Falling: Status ==> High & Rising: Low & Falling: Strength & Signal:
ADX(14w) 24.7 FALLING ==> Not Strong Not Trendless Neutral
ADXR(14w) 25.8 FALLING ==> Not Strong Not Trendless Neutral
Plus+(14w) 24.9 Falling
Minus-(14w) 28.9 Rising
Signal(DMI Crossover) -4.0 Sell ==> Negtive(Sell)
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Directional Movement Index has Mixed Strength Signals and Buy/Sell signals are undecided what is happening.

Trend Indicator(DMI):   Appropiate   Not Appropiate     Neutral      DMI(Buy)   DMI(Sell)
High & Rising: Strong Trend NOT Strong
Low & Falling: Trendless NOT Trendless
High or Low: > 25 < 20
Rising or Falling: Rising Falling
Plus+ or Minus- Plus>Minus Minus>Plus


Directional Movement Index    RSP       3/29/2019       
Trend Indicator(DMI): Level: Rising or Falling: Status ==> High & Rising: Low & Falling: Strength & Signal:
ADX(14w) 21.3 Falling ==> Not Strong Not Trendless Neutral
ADXR(14w) 26.5 Rising ==> Strong Trend FALSE Appropiate
Plus+(14w) 21.4
Minus-(14w) 25.3
Signal(DMI Crossover) -3.9 Sell ==> Negtive(Sell)



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A buy signal is given when DMI+ crosses above DMI-. A sell signal is given when DMI- crosses above DMI+.
The ADX and ADXR lines are then used to measure the strength of these signals.

Trend Indicator(DMI):   Appropiate   Not Appropiate     Neutral      DMI(Buy)   DMI(Sell)
High & Rising: Strong Trend NOT Strong
Low & Falling: Trendless NOT Trendless
High or Low: > 25 < 20
Rising or Falling: Rising Falling
Plus+ or Minus- Plus>Minus Minus>Plus

Directional Movement Index    RSP        4/5/2019       
Trend Indicator(DMI): Level: Rising or Falling: Status ==> High & Rising: Low & Falling: Strength & Signal:
ADX(14w) 20.0 Falling ==> Not Strong Not Trendless Neutral
ADXR(14w) 27.1 Rising ==> Strong Trend FALSE Appropiate
Plus+(14w) 25.6
Minus-(14w) 23.7
Signal(DMI Crossover) 1.9 ==> Positive(Buy)
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