McClellan Oscillator – Definition, Uses & Examples One-Pager

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The McClellan Oscillator uses advancing issues and declining issues on the New York Stock Exchange (NYSE) to gauge market breadth.

The components are:

  1. Advancing Issues – Declining Issues
  2. Calculate both the 19 & 39-day exponential moving average (EMA) of [Advancing Issues – Declining Issues]
  3. Plot the result of the 19-day EMA minus the 39-day EMA

The McClellan Oscillator is shown next on the chart of the Nasdaq 100 QQQQ's:

 
McClellan Oscillator overbought and oversold buy and sell signals

 

Just like the MACD, when the short-term moving average crosses above the longer term moving average, the plotted line crosses the zero line.

Therefore, when the McClellan Oscillator crosses above zero, the trend of the advance-decline issues is positive = bullish sign.

In contrast, when the McClellan Oscillator crosses below zero, the trend of the advance-decline issues is negative = bearish sign.

Generally, above +70 is considered an overbought condition and below -70 is an oversold condition.

McClellan Oversold Potential Buy Signal

A trader might consider a buy signal when the McClellan Oscillator crosses above the -70 oversold line.

McClellan Overbought Potential Sell Signal

Similarly, a trader might consider a sell signal when the McClellan Oscillator crosses below the +70 overbought line.

How to Start Trading

If you are interested in trading stocks and commodities using technical analysis, have a look at our reviews of these regulated brokers available in to learn which charting & analysis features they offer:

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Further Reading

Learn more about technical analysis indicators, concepts, and strategies including Support & Resistance, Moving Averages, Fibonacci Patterns, and many others.

Also see our guides on Forex, Bitcoin, CFD, and Option brokers to find out which technical analysis tools and platforms popular online trading brokerages offer their clients.

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