Iceduck reports an intra
day mcclellan..in #PITSTOCK .. This is about the daily McCLELLAN
I use The McClellan Oscillator as a leading
indicator. If u compare the charts
of the indexes to the charts of the oscillators you will see the
same. Mcclellan oscillator shows u when
the market is overbought or oversold..and turns before the Indexes do .
This market breadth indicator is based on the
difference between the number of advancing and declining issues on the NYSE (for
nyse mcc ) and advancing and declining issues on the NASDAQ (FOR NAZ MCC).
Primarily for short and intermediate term trading.
To calculate subtract
a 39 day EMA of advancing issues - declining issues from a 19 day EMA of
advancing issues - declining issues.
(19 Day EMA of Advances - Declines) - (39 Day EMA of Advances - Declines)
In the understanding of overbought or oversold situations, a true value of the oscillator is
exposed. A chartist will see through the oscillators that the stock he or she
has been tracking is running out of steam on the upside and is now moving into
what we call an overbought situation.
This simply means that the buying volume is now
starting to diminish from a number of trading days ago and that traders will now
start to think about selling their shares.
Conversely, when an issue has been sold by a
greater number of investors for a period of time (this time frame can vary from
1-2 weeks to 3-6 months or longer), the volume of sellers will again reach a
point where the issue is referred to as oversold.
I use it in a few different ways...
when overbought (when the osc. is at the top of
the chart) I look for tops.
when oversold ( at lower end of the chart) i look
for bottoms.
I find that the daily signals u early. and will
turn before indexes do as i have mentioned.
Another good way to use this oscillator is watch
it for crosses of the 0 line
You will get a good pop in the indexes in the same
direction of the cross. if u miss it in pre, you can still catch it on pullbacks
or bounces . You can do this because u can trust the direction of the
crossover. This will be one of those
boring days that keeps going in one direction
The last way i will discuss today is The Minor
Change
The rule is like this... if the oscillator has a
change of 4 or less u have a minor change.
75 % of the time the indexes will move in the same
direction of the change. You will
get an over 1% close in the next 2 days following
the minor change.
We refer to this as THE McCLOSE .. or a
McClellan day..
1 exception.. if u get another minor change the
following day.. this pushes it back another 2 days..
McClellan days tend to stay in 1 direction .. with
little corrections .. boring .. unless u have the direction right... then its
relaxing .. so it may be boring .. but thats better than
becoming the fuel (during the corrections) u will see in the long run its better
to sit on ur hands if u dont want to trade mcclellan direction
On up Mcclellan days u dont want to
short.
On down Mcclellan days u dont want to go
long
This has saved me tons of money.
I hope this has helped .. and maybe next time we
have a McClose .. u will make money
