ADX  Interpretation
ADX Value	Trend Strength	Comments
0-20	Non Trending	Sideways market or a phase of Accumulation/Distribution
20-25	Trending for less VolatileStocks	Some Analyst use value above 20 as Trending. Works for lesser volatile stocks
25-40	Strong Trend	This indicates very strong trend. Traders should take advantage of it.
40-60	Very Strong Trend	Rare but they do occur
60-100	Extremely Strong Trend	Very rare. Such trends are not sustainable and traders should be ready for trend reversal

 

Strong Trend: An increase in ADX value of above 25, means that trend is getting stronger and and provides better confidence to the trader.

Divergence: As mentioned earlier, divergence in ADX does not predict fall in price. As long as the value stays above 25, the trend is intact.

 

Change of Trend : ADX crossing below 25 signifies end of trend or movement in no trade zone.

IMO: Friday's rally has very limited upside, if any left in it at all. After creating two highs (Red Arrows), and failing to regain long term support (Yellow Arrows) and still closing the month below resistance, we are setting ourselves up for one of two scenarios. Either a push UP to 9850 before falling off to confirm a new range BELOW 9650. Second scenario, we fall off to to retest the lower levels of the 9000's. I don't have a specific number because there is possibility of a medium term wedge coming into play just as in 2008 (following the same pattern.) 

Everything will come down to this Friday's jobs number. we are looking for 200k jobs to have been added in Jan 2016, which would follow 292k from Dec 2015. Even though we are expecting are number lower than the previous, any report below 200k will confirm weakness in the US economy and a faulty FED policy. I say confirm because the doubts have been there since Friday's GDP report, which came in at 0.7%. (Weaker than expected.)