Our word of the day is “MCCLELLAN OSCILLATOR” Developed by Sherman and Marian McClellan,

the McClellan Oscillator is a breadth indicator derived from Net Advances, the number of advancing

issues less the number of declining issues. Subtracting the 39-day exponential moving

average of Net Advances from the 19-day exponential moving average of Net Advances forms the oscillator.

As the formula reveals, the McClellan Oscillator is a momentum indicator that works similar

to MACD. McClellan Oscillator signals can be generated with breadth thrusts, centerline

crossovers, overall levels and divergences. Usually, a small number of assets making large

gains characterize a weakening bull market. This gives the perception that the overall

market is healthy, but in reality it isn't, as rising prices are being driven by a small

number of stocks. Conversely, when a bear market is still declining, but a smaller amount

of assets are declining, an end to the bear market may be near.