Mcclellan Oscillator

Most oscillators used as indicators are designed for flatter markets or the non-trending types.

But there is one good oscillator working on market generated information which uses also market internals and is an excellent tools to guage an overbought/ oversold condition in a trending market.

This one is called the McClellan oscillator and we visit it periodically to measure extremes of bullishness/ bearishness.

You can read about the McClellan here:




The McClellan has a reading of 64 currently near the overbought level of 80 but not yet signalling extreme bullishness in the markets. This was at the close yesterday.

Our markets have been up since morning, signalling that we may have a bit more steam left.

And as usual, market generated information works better than parameter based ones.

SPX- Revisted

My last post here called for a halt in the rally at 1146 in the SPX, to be followed by about a 50 point drop in the index after it hit that level.Also noted was that the Vix had bottomed up and was wanting to resume it's journey upwards.

Let's look at where we are now. First the chart of the Spx

We are having important support ( green line)  which has been defended for the past 3 months. Also the oversold nature of the MOSC at a level last seen in October 2008, points to at least a 20 point pull back in the index in the next 2 trading sessions.

let's look at the Vix:

27.31- has been a vertical climb and now calling for a pullback.

Those who booked their shorts and carried longs would be a happy bunch on Monday.