What causes markets to become choppy?

When investors get cautious and have uncertainty about market conditions which affects the future movement of prices keeping the buyers and sellers almost equal and hence it depicts a lack of a strong trend. While it is generally easier to make profitable trades in a trending market, there are situations in which extended periods of choppiness raise the chances of explosive breakouts.

The choppiness index can be used to identify both weak and strong trend market characteristics. Choppiness index values of over 65 reflect a trendless market state and a move below this value indicates that the current trendless state is giving way to the start of a strong trend.