McClellan Summation Index
The McClellan Summation Index was developed by Sherman and Marian McClellan. It is a longer-term version of the McClellan Oscillator and is used to determine the market's overall health.
The McClellans suggest a reading below -1300 hints that a major market bottom is near while a reading above 1600 indicates a major top will be hit soon.
These top and bottom signals are more significant when a divergence between the overall market and this index is present.
The following two charts exemplify how a positive divergence between an index and its McClellan Summation Index works. Notice the NYSE making a series of lower highs, but the Summation Index made two higher lows. Strength was building, and the NYSE took the lead of the SI and rallied.
