McClellan Oscillator

A market breadth indicator calculated from the difference between 19-day and 39-day exponential moving averages of daily NYSE advancing minus declining issues.

The McClellan Oscillator was developed by Sherman and Marian McClellan in 1969. It applies MACD mathematics to breadth data rather than price: it calculates the difference between the 19-day EMA and 39-day EMA of the daily net advances (advancers minus decliners) on the NYSE. Readings above zero indicate more stocks are advancing than declining over the recent period; below zero indicates the opposite.

The oscillator is used to identify overbought and oversold conditions in the overall market (not individual stocks) and to spot divergences. Readings above +100 suggest the market is overbought in the short term; below −100 suggests oversold conditions that may precede a bounce. More meaningfully, when the market makes new highs while the McClellan Oscillator makes lower highs, it signals that fewer stocks are participating in the rally — a breadth deterioration warning.

The McClellan Summation Index is a running cumulative total of the oscillator, providing a longer-term view of breadth trends. Rising Summation Index typically accompanies bull markets; declining Summation Index warns of weakening market internals. Together they provide two complementary time frames for breadth analysis — the oscillator for short-term conditions and the summation index for the longer trend.

This definition is for informational and educational purposes only. Nothing on Finance Compass constitutes financial, investment, or trading advice. Always conduct your own research and consult a qualified professional before making financial decisions.