My current trading activity has reverted back to a similar state to that of summer 2011. Again, this is due to the volatility and/or the lack of direction in the indices. As a result, I am fully in cash sitting and waiting. Not exciting in one sense - if you can't trade, you can't make money - but exciting in another sense, as trending phases always follow non-trending phases. The issue with this is that you will never know when the market will decide to move from one state to another.
Below are some charts (on a weekly timeframe) highlighting the lack of direction at the moment.
Being in the UK, the lack of direction over the last year or so in the headline FTSE 100 from May 2013 has been clear for all to see. This chart is of the broader FTSE All share index, which shows a similar picture.
It is a similar picture in the US. While the Nasdaq, Dow and S&P are close to highs, the broader based Russell 2000 is showing a clear change in the market state from the nice stable uptrend that started in early 2013 to a volatile, non-trending state so far this year. Which way will it go?
The simple answer is no one knows. Trend followers know this and wait for the markets to tip their hand. Patience and discipline are tested in periods such as these. However, they are fully in your control. There's no need to try and anticipate what will happen. The markets will give you the signal at the appropriate time.