McClellan Oscillator

What is the McClellan Oscillator?

The McClellan Oscillator is a breadth-momentum indicator developed by Sherman and Marian McClellan in 1969, building on P.N. Haurlan's early use of exponential smoothing in market analysis. Each day you take net advances (advancing issues minus declining issues, classically on the NYSE) and subtract the 39-day EMA of that series from its 19-day EMA. The result oscillates around zero: positive when short-term breadth is improving faster than its longer baseline, negative when it is deteriorating. Many modern implementations use ratio-adjusted net advances, dividing the daily difference by the sum of advances and declines (often scaled by 1,000), so readings stay comparable as the number of listed issues changes.

The 19- and 39-day lengths are not arbitrary. Haurlan, a Jet Propulsion Laboratory engineer who published the Trade Levels reports, popularized exponential smoothing constants of 10% and 5% for market work, which correspond to 19- and 39-day EMAs. The McClellans built their oscillator as the difference between those two trend values and published the method in Patterns for Profit (1970). Their son Tom McClellan has continued the family's breadth work, including the ratio-adjusted versions used for long histories.

Readings above zero say the average stock is participating in gains; deep negative spikes often accompany selling climaxes, and divergences against the index warn that a price move lacks participation. The cumulative running total of the oscillator is the McClellan Summation Index, a slower gauge of the breadth trend that frames the regime around the oscillator's swings.

Within market-internals work it is the momentum gauge. Level-based tools such as the % of stocks above the 20/50/200-day MA and intraday reads such as the TICK index show where participation stands, while the McClellan Oscillator shows how fast participation is changing. Deep extremes often coincide with fear readings elsewhere, such as spikes in the VIX, which is why it features in composite risk dashboards. Like all breadth tools it describes participation, not price, so it is read alongside the index rather than instead of it.

How to read the McClellan Oscillator on a chart

It plots as an oscillator around zero in its own pane; reading it means recognizing which of its known behaviors is on screen.

1. 1Confirm the calculation first: which universe it covers (NYSE, Nasdaq, or a custom basket) and whether it is raw or ratio-adjusted, because typical levels differ between versions.
2. 2Read the zero line: sustained time above it means short-term breadth momentum favors the bulls, while repeated failures just beneath it mark persistent distribution.
3. 3Mark extremes against that version's own history. On the classic NYSE calculation, readings beyond roughly plus or minus 100 are commonly cited as stretched, but calibrate to the series you actually plot.
4. 4Hunt divergences at price extremes: a new index high with a clearly lower oscillator peak means fewer stocks are carrying the advance.
5. 5Frame it with the Summation Index: oscillator dips against a rising Summation Index are pullbacks in an advancing breadth regime, while the same swings under a falling one are rallies into weakness.

How it's calculated

The oscillator reads breadth momentum as the spread between fast and slow EMAs of daily net advances; the Summation Index is its running total.

Classically computed on NYSE daily breadth; the EMA approach follows P.N. Haurlan's earlier Haurlan Index.

The ratio-adjusted form divides by advances plus declines so readings stay comparable as the number of listings changes; the McClellans use it for their published figures.

The Summation Index is often calibrated so that neutral sits near +1000 rather than 0.

How traders use it

• Zero-line crosses mark shifts in breadth momentum and are used to confirm or question index-level trend signals built from advance/decline internals.
• Extremes are read two ways: unusually deep negative readings flag washed-out selling that sometimes precedes rebounds, while extreme positives can mark either short-term overbought conditions or the kind of initiation surge studied under breadth thrusts.
• Divergences against price at new index highs, especially when other internals such as new highs minus new lows agree, warn that leadership is narrowing.
• Regime filtering via the Summation Index: staying with index exposure while the Summation Index rises and tightening risk when it rolls over, a slower cadence than the oscillator's own swings.
• Dashboard duty: combined with volatility gauges and sector ratio charts to judge whether an index move has broad sponsorship or is being carried by a handful of mega-caps.

McClellan Oscillator vs other breadth gauges