The Average Directional Index (ADX) was developed by J. Welles Wilder in order to evaluate the strength of the current trend, either up or down. It's important to determine whether the market is trending or oscillating so that the correct indicator for the market condition is used. The ADX fluctuates between 0 and 100, readings below 20 indicate a weak trend and readings above 40 indicate a strong trend. When the ADX moves from below 20 to above 20 it is a sign that the market is moving out of a sideways range and into a trending phase.