McClellan Indicators (Oscillator, Summation Index w/ RSI & MACD)

The McClellan Indicators tool provides a comprehensive suite of market breadth analytics for the NYSE and Nasdaq, enabling traders to gauge internal market strength and identify potential trend reversals.

Usage

This tool can be used to monitor market internals through four distinct modes, selectable via the indicator settings:

• McClellan Oscillator: Useful for identifying breadth thrusts and extremes. Traders typically look for divergences between the oscillator and the index price, or overbought/oversold levels to anticipate market turns.
• McClellan Summation Index (MSI): Used for intermediate trend confirmation. A 10-period EMA is included to help identify shifts in internal momentum through crossovers. Background shading indicates the current bullish or bearish internal trend.
• MSI RSI: Applies the Relative Strength Index to the Summation Index. Overbought (>70) or oversold (<30) readings indicate strong internal trends. "Hooks" or crossovers back from these levels often precede trend changes.
• MSI MACD: Applies the Moving Average Convergence Divergence to the Summation Index. This helps quantify the strength of the internal trend. Crossovers and histogram shifts provide signals for potential reversals.

Details

The script utilizes request.security to fetch advancing and declining issues for the chosen exchange (ADVN/DECN for NYSE or ADVQ/DECQ for Nasdaq).

• Oscillator Calculation: Calculated as the difference between a 19-period and a 39-period EMA of the net advances.
• Summation Index (MSI): A cumulative total of the McClellan Oscillator values.
• Secondary Analysis: By applying RSI and MACD formulas directly to the Summation Index rather than price, the tool reveals exhaustion and momentum shifts within the underlying breadth data that might not be visible on a standard price chart.

Settings

• Exchange: Select between "NYSE" or "Nasdaq" data sources.
• Indicator: Choose which of the four tools to display (Oscillator, Summation Index, MSI RSI, or MSI MACD).
• MSI EMA Length: Adjusts the period for the exponential moving average used on the Summation Index plot.

FAQ

How do I access the McClellan Indicators?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.

Which exchange should I select?

The exchange should typically match the index or basket of stocks you are trading. For example, use NYSE for SPX-related analysis and Nasdaq for QQQ-related analysis.

What do the background colors signify?

In the Summation Index and MSI MACD modes, background shading highlights whether the market internals are in a bullish or bearish state based on signal line crossovers.