About the McClellan Oscillator and Summation Index

[slipslidingaway]

Not sure how many people watch the McClellan indicators, but I thought it might be useful information for people who are managing their own funds.

http://www.decisionpoint.com/TAcourse/AboutMcOsi.html

"The McClellan Oscillator and Summation Index are a breadth-based indicator, which means it is derived from the daily advances minus declines on the New York Stock Exchange. These indicators were invented in the 1960's by Sherman and Marion McClellan, and since then they have proven to be some of the most useful analysis tools in existence...

McCLELLAN OSCILLATOR

The McClellan Oscillator is an intermediate-term indicator, but it can also be used for short-term timing...

The McClellan Summation Index is a cumulative total of the daily McClellan Oscillator readings. It is normally posted on the chart as a series of dots so that we can observe the acceleration in breadth as represented by the space between the dots.

McCLELLAN SUMMATION INDEX

The direction of Summation Index movement, up or down, is an indication of whether money is moving in or out of the market..."


Charts can be accessed from the market summary page on stockcharts or by using the symbols $NYMO, $NYSI, $NAMO and $NASI on the stockcharts site.

In the spring and summer of 2007 the Summation index was making lower highs while the general market continued to make higher highs. These divergences with price, whether negative or positive, can be an early warning sign in the direction of the market.


http://stockcharts.com/def/servlet/Favorites.CServlet?obj=msummary&cmd=show,iday&disp=SXA

http://stockcharts.com/charts/indices/McSumNYSE.html

http://stockcharts.com/charts/indices/McSumNASD.html


ADVANCES & DECLINES
http://finance.yahoo.com/advances


Some background on these indicators...

http://www.mcoscillator.com/about.html

Sherman McClellan

"Sherman earned a degree in business administration and economics in college, but found out after graduation that the standard types of fundamental analysis taught did not provide enough of the answers concerning why and when stock market prices moved. Dissatisfaction with a number of methods for technical analysis led him to develop new techniques for assessing market conditions.

Sherman and his mathematician wife Marian developed the McClellan Oscillator and Summation Index in 1969. Many other traders, investors, and software developers have found these to be useful market timing tools. The Oscillator is derived from the number of advances and declines each day on the New York Stock Exchange. To learn more about these indicators, go to Oscillator..."

[slipslidingaway]

1. FWIW there is a small positive divergence on the NYSI & NASI

charts.

[slipslidingaway]

2. Adding this site for those who want to examine the internals of

the market a little more.

http://forums.technicalwatch.com/mb/fib_1618?forum=11515

Specifically the Cumulative charts NYSE & PM Breadth Data.

[slipslidingaway]

3. kick n/t

[slipslidingaway]

4. kick nt