Sideways markets

For a large share of the time, markets neither rise nor fall; they oscillate inside a band. This is a sideways market, or range: the highs sit at roughly the same level, and so do the lows. If the sequence of highs and lows has no direction, there is no trend.

Recognising a sideways market is a skill, because the eye wants to find direction in every chart. Before you call something a band, count the evidence: two highs on top and two lows underneath, all at roughly the same level. Ask yourself: are the recent highs actually rising, or are they hitting the same area again and again? If the answer is "the same area", what you have is a band, not a trend.

"No trend" is not useless information — quite the opposite, it protects you. Tools built on the assumption of a trend, such as trendlines, produce one misleading picture after another in a sideways market. Being able to name the market's current state is being able to name which tools are meaningful right now. It does not tell you when the band ends either: expecting that it "must pick a direction soon" is impatience, not a reading.