The McClellan Oscillator is a market breadth indicator which was developed by Sherman and Marian McClellan. It is based on the difference between the number of advancing and declining periods. When it rises, advances are gaining the upper hand so the overall market goes up and vice versa. It is sometimes seen as the MACD
for the Advance/Decline Line
. Signals can be derived from the oscillator crossing the middle line, from divergences and from overbought / oversold conditions. The McClellan Oscillator can show a sustained breadth thrust when it rises from a strong negative to a strong positive value. The indicator is best used in combination with other analysis techniques.