What Is The McClellan Oscillator? | August 2023 Update!

The McClellan Oscillator is a market breadth indicator that uses advance-decline data to gauge price momentum. This classic technical analysis technique can help validate what you see on the chart of the S&P 500 or Nasdaq, and this week it generated a key bearish signal! We'll break down the construction of this technical indicator, and talk about downside potential for the SPX given this bearish reversal.
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Dave helps active investors and financial advisors make more informed investment decisions, inject more discipline into their investment process, and enrich relationships with their clients. Feel better about making better decisions!
Dave is the Chief Market Strategist at StockCharts.com, where he helps investors minimize behavioral biases through technical analysis. He is a frequent host on StockCharts TV, and he relates mindfulness techniques to investor decision making in his blog, The Mindful Investor.
He's also President and Chief Strategist at Sierra Alpha Research LLC, a boutique investment research and consulting firm focused on managing risk through market awareness. He combines the strengths of technical analysis, behavioral finance, and data visualization to identify investment opportunities and enrich relationships between advisors and clients.
Dave was previously a Managing Director of Research for Fidelity Investments in Boston, a Past President of the Chartered Market Technician (CMT) Association, and started in the financial industry just after the March 2000 market top at Bloomberg in New York.
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[@rojabuckingham9034]

Excellent Video! This is my favorite indicator.

[@DKellerCMT]

So glad you enjoyed this one! D

[@wmbrice]

Thanks, Dave!

[@DKellerCMT]

Cheers WB thanks for the note! D

[@patricelaliberte4492]

Very interesting, first time I ear about de MCLennan oscillator. Thanks for the good explanations.

[@DKellerCMT]

Glad you enjoyed it! D

[@Pradyot21]

What a fantastic explanation!

[@DKellerCMT]

Thanks so much! D

[@1309gsk]

gt video. my question was how the mclelan oscialtor and qqq reacts? have a nice week end.....stay safe

[@DKellerCMT]

Thanks for the Q! D

[@JanKowalski-yz5gq]

David. Could you just analize Fisher Transform on weekly chart NDX 100? It is the best oscilator in my opinion. Thanks.

[@DKellerCMT]

Not an indicator that I use much, but I do appreciate the focus on price distribution as an input! D

[@samgeller4021]

David as always great video and forcing one to think of ranges into the future.I would differ in that the 50 day would seem a critical level.If this is an up market the 50 should give support and then would get a higher low. If down to trendline and 200 moving average the bull market thesis becomes more in jeopardy, but first we need to see how the market contends with the fifty day level.I know it is not far down so next week is critical to my thinking.

[@DKellerCMT]

Wonder how the picture has changed in your opinion in the last three weeks?... D

[@samgeller4021]

@@DKellerCMT the stock market has made a very impressive recovery and at the moment breaking below the 50 was a failed break down we’ll see what happens over the next two days. Lots of important data and we’ll see what price has to say again I want to tell you I think your final bar show is really excellent.

[@gheadwind]

always great content Dave! for your final bar, invite Brian Shannon with his AVWAP analysis approach to this market

[@DKellerCMT]

Appreciate the suggestion will get to work on this! D

[@RobertCarlson-fs4gg]

At times, the $NAMO indicators rotates from bullish to bearish and back again. Buying and selling based on this indicator alone would create many trades and some losing ones. Should one use other indicators with $NAMO? What indicators would you recommend? Perhaps $NASI and $BPNDX?

[@DKellerCMT]

McClellan Oscillator is fairly short-term indicator. For a long-term market trend, I go with my Market Trend Model! kzbin.info/www/bejne/rWTHoZeZmrqem7M D

[@mikeydrookie351]

how do you color code the chart? thank you

[@DKellerCMT]

That's using the annotations tool on StockCharts. Click "Annotate" below the chart then use the rectangle shape. D

[@mikeydrookie351]

okay I will give it a try. Thanks for all you do. I said it before your the reason why I am a monthly stock charts subscriber@@DKellerCMT

[@mikeydrookie351]

is there a way to have the red and green automatically placed on the charts?@@DKellerCMT

[@stevesalter3965]

Likely go to 4100 (200 sma) on the $spx to 4200 (38% Fib) over the next 45 days or so. Nice buying opportunity.

[@DKellerCMT]

Could very well be a good buying opportunity for a year-end rally? D

[@titusrider7948]

A Monday pullback to 4450 then bounce higher

[@DKellerCMT]

50-day MA now in play all around! D

[@titusrider7948]

Thanks David, I got that one right 😊 it goes against good money management but I wanted to backup the truck when it bounced off 4450, do you ever feel that way?

[@Timmy51m]

Going to have to club this market on the head a few times to knock it out I think, so not expecting much.

[@DKellerCMT]

Seems to be very true! D

[@chrisdelzio4829]

McClellan himself is bearish for the same reasons Keller

[@DKellerCMT]

And we're both based in Seattle. Something in the water?... D

[@paeade]

Probably a 6-8 week decline with a low in mid to late September.

[@DKellerCMT]

Tracking this pretty well so far..... D

[@1309gsk]

4400 seems obvious target....................

[@DKellerCMT]

4500 still overhead resistance here... D

[@lakshmiprabhakarkoppolu9100]

David ❤ You are a bull by birth. You are 50% wrong with every bearish predictions or those bearish predictions are short lived for less than 20 days.

[@DKellerCMT]

Not sure I follow all of what you said, but I would say that if you're bearish over time you are fighting hundreds of years of market history! D