What happens when the ADX line rises above both DMI lines?

When the Average Directional Index (ADX) line rises above both the +DI (Positive Directional Indicator) and -DI (Negative Directional Indicator), it indicates that the market is gaining strength in a trending direction, and it often suggests that the market may be "waking up" to a new trend.

The ADX itself measures the strength of a trend without indicating its direction. A rising ADX above both DMI lines usually suggests that the market is becoming more directional, as it reflects increased buying or selling pressure. This change is typically interpreted as a signal for traders to pay attention, indicating that a significant price movement may be forthcoming, thus demonstrating that market activity is becoming more defined rather than remaining flat or indecisive.

When the ADX rises while sitting above both directional indicators, it reinforces the idea that a strong trend is developing, rather than signaling a loss of volatility, indecision, or entry into a bear phase. This context of a strengthening trend, rather than confusion or weakening, aligns with the idea of the market "waking up."