McClellanSummationIndex

Description

The McClellan Summation Index is a long-term indicator calculated based on values of McClellan Oscillator. Two modes of calculation are available for this study: cumulative and non-cumulative. The cumulative mode suggests that the index be equal to cumulative sum of McClellan Oscillator values, i.e., at any given bar it equals to the sum of all preceding values. The second mode uses McClellan Oscillator and two exponential moving averages (EMAs): a 10% percent and 5% EMAs of market breadth (which can be simple or ratio-adjusted; for details, see the McClellan Oscillator article) are subtracted from the oscillator value. Note that default length input parameters for the EMAs match the mentioned percentage values.

The McClellan Summation Index can be used to measure the uptrend strength. In the ratio-adjusted mode, the strong uptrend can be signified by index values going from below -500 to well above +500; in this mode the indicator is plotted around the zero level. In the simple mode, the indicator is plotted around the +1000 level and uptrend is recognized when the values rise from negative to well above +2000.

Input Parameters

Parameter Description
exchange Defines market to use advance/decline data from.
fast length The number of bars used to calculate the fast EMA.
slow length The number of bars used to calculate the slow EMA.
ratio adjusted Defines whether or not to use the ratio-adjusted mode of market breadth calculation.
is cumulative Defines whether to use the cumulative or the non-cumulative mode of index calculation.

Plots

Plot Description
SummationIndex The McClellan Summation Index plot.
OverBought The overbought level; fixed at +500 in the ratio-adjusted mode. In the simple mode, this plot is not defined.
OverSold The oversold level; fixed at -500 in the ratio-adjusted mode. In the simple mode, this plot is not defined.
NeutralLevel The neutral level; fixed at 0 in the ratio-adjusted mode and at +1000 in the simple mode.

Example*

*For illustrative purposes only. Not a recommendation of a specific security or investment strategy.

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