Trading using the McClellan Oscillator

Overview

The McClellan Oscillator is a market breadth indicator that is based on the smoothed difference between the number of advancing and declining issues on the New York Stock Exchange. The McClellan Oscillator is a popular market "breadth" indicator that can be used for market timing for short term traders. This indicator can give traders a true sense of what is happening under the surface in the stock market. The McClellan Oscillator is one of the most popular breadth indicators.

The McClellan Oscillator was developed by Sherman and Marian McClellan. Extensive coverage of the oscillator is provided in their book Patterns for Profit

Understanding Breadth of Market

Breadth refers to the fraction of stocks that are participating in an up or down move in the market. For example, if a large number of stocks are participating in an down move in the market then we can interpret this as being bearish. If, on the other hand, only a small number of stocks are making an down move in the market, then we can interpret this as being bullish. A healthy bull market is accompanied by a large number of stocks making

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