McClellan Oscillator Update…

Topping signals by the McClellan Oscillator are more difficult to detect than bottoming signals. However, the picture below illustrates an interesting pattern that has caught out attention.

While the S&P 500 Index (SPX) has made new highs, the McClellan Oscillator has not been able to break the high mark it reached in later November when SPX was trading at lower prices.

This divergence, highlighted by the red circles, is signaling that price has gotten ahead of itself. We’ll continue to note McClellan Oscillator levels as the market trades through Wednesday’s FOMC announcement into the end of the week.

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