It's interesting how history gets written. The attached image shows President Lincoln meeting with General McClellan just before the Battle of Antietam (the bloodiest battle of the Civil War). This is the General that was eventually sacked by Lincoln for being too cautious. He eventually ran for President in 1864 on an anti-war platform and lost. Since then, history has not been kind on the good General (in high school, I remembered him as "a loser" and that was a northern school!).
Anyway, enough history. I wanted to talk about the other McClellans; the ones who built one heck of a technical indicator. That would be Sherman and Marian McClellan. They built the McClellan Oscillator which is a momentum indicator (similar to MACD) that is applied to advance/decline data for any major index you want to test. The McClellan Oscillator is formed by using an index's net advance data and subtracting the net advance 39-day ema from the net advance 19-day ema. It is available from most good TA services (such as SharpCharts) and has been pretty effective in giving warning signals on indexes.
I use the oscillator to track the Nasdaq and the NYSE Composite. In the chart below, I put the NYSE composite behind the oscillator to give everyone an idea about what the oscillator is predicting. When the oscillator crosses below zero (or strongly heads towards zero), the oscillator is signalling a sell. When the oscillator crosses above zero, it signals a buy. Again, I only use this indicator with a host of other technicals before I make a move in the market technically. This is just one more tool in the tool basket than will help with good trading.
Anyway, enough history. I wanted to talk about the other McClellans; the ones who built one heck of a technical indicator. That would be Sherman and Marian McClellan. They built the McClellan Oscillator which is a momentum indicator (similar to MACD) that is applied to advance/decline data for any major index you want to test. The McClellan Oscillator is formed by using an index's net advance data and subtracting the net advance 39-day ema from the net advance 19-day ema. It is available from most good TA services (such as SharpCharts) and has been pretty effective in giving warning signals on indexes.
I use the oscillator to track the Nasdaq and the NYSE Composite. In the chart below, I put the NYSE composite behind the oscillator to give everyone an idea about what the oscillator is predicting. When the oscillator crosses below zero (or strongly heads towards zero), the oscillator is signalling a sell. When the oscillator crosses above zero, it signals a buy. Again, I only use this indicator with a host of other technicals before I make a move in the market technically. This is just one more tool in the tool basket than will help with good trading.
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