The McClellan oscillator is a market breadth indicator used in technical analysis by financial analysts of the New York Stock Exchange to evaluate the balance between the advancing and declining stocks.
[1] The McClellan oscillator is based on the Advance-Decline Data and it could be applied to stock market exchanges, indexes, portfolio of stocks or any basket of stocks.
The simplified formula for determining the oscillator is: where advances is the number of the NYSE listed stocks which are traded above their previous day close and "declines" is the number of the NYSE listed stocks traded below their previous day close.
Therefore, crossovers of McClellan Oscillator and zero center line around which it oscillates would have the following meaning: The McClellan Summation Index (MSI) is calculated by adding each day's McClellan oscillator to the previous day's summation index.
MSI properties: The Summation index is oversold at −1000 to −1250 or overbought at 1000 to 1250.