Falling McClellan Oscillators
The NYSE and NASDAQ McClellan Oscillators were extremely high a few days ago as stocks surged. Now that stocks are falling, both McClellan Oscillators are also falling.
The NYSE McClellan Oscillator has fallen below 0 (negative momentum):
When the NYSE McClellan Oscillator went from above 100 to under 0 within a month, the S&P's pullbacks over the next few weeks and months were often muted. Many of the extremely high McClellan Oscillator readings occurred after a bear market or in the later phases of a bear market when stocks bounced/. That's why even though the S&P could fall further in the short term, it usually rallied over the next year:
Similarly, the NASDAQ McClellan Oscillator is coming down from extremely high readings. The last time we saw such high readings was after the stock market bottomed in December 2018:
In a bear market this could be bad news since several cases from 2001 and 2008 saw stocks go much lower in the short-medium term. But in a bull market, this usually led to muted pullbacks: