A market breadth indicator. It was developed by Sherman and Marian McClellan. It is the difference of a 19-period EMA and a 39-period EMA of advancing minus declining issues in the New York Stock Exchange.
A reading above 100 implies extreme overbought conditions whereas a reading below -100 signals extreme oversold conditions. A buy signal is triggered when the oscillator falls in the area between -70 and -100 and then turns up. Similarly, a sell signal is generated when the oscillator rallies in the area between 70 and 100 and then turns down.
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