How to use McClellan Oscillator according to Tom McClellan

The McClellan oscillator is a powerful charting tool indeed, one of the all time greats in technical analysis. Founded by the McClellan family, Tom carried on the family tradition in charting and is doing some top rate work. I've been using this indicator as one of my tools for a number of years. But Tom recently came out with one of his email newsletters explaining this a little bit clearer than I've been using the indicator.

There are two ways of properly using this indicator according to Tom. He calls it a simple and complex method. I lean towards doing this in simple ways in trading and Tom seemed to go this way as well in this case. Trend lines can be drawn on the indicator by following a series of lower highs on the chart. It's simple, when the indicator breaks out of this trend, it's bullish. 

Shortly after this episode was aired, there was a quick and large correction in the S&P 500. The McClellan oscillator structure has been setting up nicely as mentioned in the podcast. At the critical moment, the indicator had a failed breakout of the uptrend. This indicated that the bears are still in charge of the market. 

As of early March 2020 we'll still have to wait on standby for the bulls in terms of what's going on with the McClellan oscillator. It still remains deep in negative territory and actually reached a lower level than at the depths of the Q4 2018 selloff. The trend line I drew in on the oscillator is still valid so let's see how long it takes to break out of that trend of lower highs.

I'm breaking my own trend on the channel a little bit and posting an instructional video. I hope you like it as it'll be a part of a playlist and hopefully the first of many.

Credit to Tom McClellan's Free "Chart in Focus" material which inspired some of the content in this video. It's highly recommended, also consider some of his paid services! Please reach out with any feedback, most importantly the reason I create trading content is to meet with other traders. I'm big on the quality of followers of my content, I try to get to know each one personally.

To Watch this podcast episode on YouTube: https://youtu.be/0_VF8iEUj7s

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