Finding Leaders in a Choppy Market: Joe Rabil on ADX, Momentum, and Breadth

In this episode, Dave is joined by Joe Rabil of Rabil Stock Research—one of my favorite chart-focused voices and a fellow StockCharts contributor. Joe describes his process as “trend following on steroids,” and he explains why this environment demands discipline: the major indexes can look fine on the surface, but momentum has been fading and leadership has been shifting beneath the hood.

We dig into Joe’s use of ADX to judge trend strength, why a market can drift higher without real momentum confirmation, and how a consistent bottom-up routine (reviewing hundreds of charts) can give you an edge versus only watching indexes and sectors. Joe also highlights where he’s seeing emerging relative strength in early 2026—especially in materials, energy, healthcare, and select industrials—and how to think about risk, stops, and timeframes when conditions get choppy. Recorded 1/20/26.

You can check out Joe's book at https://amzn.to/4bNkFmp and learn more about his work at https://rabilstockresearch.com/.

00:00 Emerging strength and “optimism?”
00:25 Episode intro + guest overview (Joe Rabil)
01:12 Setting the stage: “Black Tuesday” selloff + Q4 to January transition
02:00 Big picture: S&P near highs but struggling with momentum
03:36 ADX: how Joe defines a “real” breakout
04:42 ADX basics: buyers vs sellers and what matters most
05:49 Bottom-up opportunity: finding strength outside tech
06:27 Relative strength during declines: what to watch if the market slips
08:21 “Not a market for a novice”: why you must do the work
10:14 Why predicting is a trap + using indicators and sentiment
11:03 Key levels, undercuts, and sentiment shifts at major turns
12:36 Joe’s edge: scanning thousands of charts vs index/sector-only views
15:10 Where strength is emerging: materials, energy, healthcare, industrials
19:06 Practical routine: how to build a weekly chart review process
22:52 Energy vs crude oil: why stocks often lead the commodity
24:25 Biggest risk: discipline, pullbacks, and avoiding “chasing”
26:32 “Trend following on steroids”: breakout characteristics + position risk
29:52 Multiple timeframes + ATR-based risk management
32:12 Wrap-up + where to find Joe’s work

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