The McClellan Oscillator moves around zero. A cross above zero shows that breadth momentum has turned positive, and a cross below zero shows that it has turned negative. Readings far above zero mean that a large share of stocks are rising at once, which often marks an overbought, short-term extreme; readings far below zero point to an oversold market. Because the range depends on the number of stocks in the index, compare a reading with the past extremes of the same index. Divergences matter too: a market that makes a new low while the oscillator makes a higher low often has selling that is running out of steam.
The charts above show the McClellan Oscillator under the price of 24 stock indexes, from the S&P 500, Nasdaq 100 and Russell 2000 to the FTSE 100, DAX and Nifty 50, so you can compare breadth across markets at a glance. Click a chart to open a larger version.
Related stock screens: New 52-Week High Stocks, New 52-Week Low Stocks and Price Crossed Above MA(200) Stocks. You can also use market breadth as a filter in your own screens and strategies in the Formula Screener and the Strategy Backtester.
The McClellan Oscillator is a short-term market breadth indicator developed by Sherman and Marian McClellan. It measures the momentum of the advancing and declining stocks in an index.
It is the difference between the 19-day and the 39-day exponential moving averages of net advances, the number of advancing stocks minus the number of declining stocks.
A cross above zero means the faster average of net advances has moved above the slower one, so breadth momentum is turning bullish. A cross below zero means breadth momentum is turning bearish.
The Oscillator measures short-term breadth momentum and swings around zero. The Summation Index is the running total of the Oscillator values, so it moves more slowly and is used for the intermediate-term trend.
Yes. In the Formula Screener, mo is the McClellan Oscillator. For example, (mo > 0)@nyse and price ca sma(50) finds stocks crossing above their 50-day SMA while NYSE breadth momentum is positive. The same condition works in the Strategy Backtester.
