The McClellan Oscillator is derived from the number of advances and declines each day on the New York Stock Exchange and smoothed the daily advance-decline differences by the use of two exponential moving averages. The Oscillator represents the daily difference between these two moving averages.
The McClellan Oscillator was developed by Sherman and Marian McClellan.
Live McClellan Oscillator chart provided by FreeStockCharts
Timing the Market with Unique Indicators presented by Tom and Sherman McClellan Video-on-Demand
“The McClellan Oscillator and Other Tools for Predicting Market Direction” Seminar Audio Recording
What is the McClellan Oscillator?
The McClellan Oscillator is a market breadth indicator which is based on the smoothed difference between the number of advancing and declining issues on the New York Stock Exchange. Indicators which use advancing and declining issues to determine the amount of participation in the movement of the stock market are called "breadth" indicators. It was developed by Sherman and Marian McClellan.
The signals could be generated after identifying the overbought and oversold regions. When the McClellan Oscillator lies into the oversold area (-70 to -100) and turns up, it is buy signal and sell signal occurred when the oscillator rises into the overbought region and then turns down.
The oscillator’s readings above +100 or below -100 indicate extremely overbought or oversold areas. Normally, it is a sign of a continuation of the current trend.
Chart: S&P 500 Index ETF (SPY) price chart with McClellan Oscillator trading zones below.
Chart Created with thinkorswim by TD Ameritrade. For Educational Purposes Only.
(Download thinkorswim: http://bit.ly/25ebooktos )
The McClellan Oscillator is the difference between 10% (approximately 19-day) and 5% (approximately 39-day) exponential moving average of advancing minus declining issues.
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