Heute ist Freitag, der 26. Juni. Herzlich willkommen zu einem weiteren Sonderpodcast, featuret bei Handelsblatt im Rahmen der Serie mit der Foundation for the Study of Cycles. Unser heutiges Interview ist mit Sherman und Tom McClellan, die an der Wall Street und im Finanzbereich bekannt wurden durch den McClellan-Oszillator. Das Interview ist auf Englisch. Wer deutsche Untertitel haben möchte, findet die bei mir auf meinem YouTube-Kanal.

Wir sind in New York bei der Foundation for the Study of Cycles, einer Zyklen-Konferenz. Und wir sprechen mit Tom und Sherman McClellan, die Entwickler des bekannten McClellan-Indikators. Viele Anleger schauen nur auf den S&P und auf den Nasdaq. Weil Tom und Sherman schauen unter die Oberfläche. Marktbreite, Zyklen und die Frage, wie stabil eine Rallye ist, also wie viele Aktien eine Rallye eigentlich tragen.

Maybe the question for both of you guys, I mean, would you have ever thought that the name McClellan would be one of the most recognized names for anybody that works with technical analysis on Wall Street and beyond Wall Street? Well, the interesting story about that is that when my parents developed the McClellan Oscillator and the McClellan Summation Index, they didn't apply that name to it. It was done by a man named Gene Morgan, who had a TV show on a local UHF TV station in California called KWHY, Channel 22. And he had a show called Charting the Market that he would put on a half an hour after the close. Und so he would have hand drawn charts because this was the 1960s that was the only way to have a chart and he would give a recap on what the market was doing well he put out a call to all of his viewers and said if anybody has something interesting that you're looking at let me know and my father, called him up and said hey I have something that you might want to see and it was what came to me known as the McClellan Oscillator and so he invited my father on air to introduce it to the viewers The viewers liked it. Gene Morgan liked it. Gene Morgan had to call it something, so he called it the McClellan Oscillator because he was showing Sherman McClellan's indicator. And so that was where the name came from. So now Walter changed a lot over the decades.

Did you ever adapt the Oscillator to the changes of the market, or is there no need to do so? No need to do so. Yes and no. We've expanded it to other markets so you can calculate a McClellan oscillator for the NASDAQ because that has its own separate breadth data. The original one for the NYSE is probably still the best one because you get the best breadth indication message from the advanced decline data for the NYSE. We also calculated for sectors, but it's not very useful there because most sectors exhibit what we call herd behavior. They'll all be up one day, they'll all be down the next. And so you don't get the breadth message. One of the best places lately that we use the McClellan Oscillator is in breadth data for high yield bonds, the junk bonds, because they are the most liquidity sensitive instruments out there. If liquidity is doing well, the junk bonds will be doing well. But if liquidity starts to turn bad, that's the first place that you'll see.

The instruments suffering. And that will show up where, first, before anything else, it says, hey, there's a liquidity problem. It's like, you know, if you have a herd of wildebeest, the weak ones will die first if there's a drought. And that's what the junk bonds do. Was ist die Unterschiede zwischen der Summation und dem Oscillator? Und welcher würde man dann preferieren Sie, vielleicht? Die Summation ist die Daten von dem Oscillator jeden Tag. So the summation changes by the number that the oscillator is. And the key, the really key point about the work that they did starting in the 1960s was that they were wanting to look at breadth data. And there was a man publishing a newsletter called the Trade Levels Report. His name was Pete Harlan. And he was the man who introduced the use of exponential moving averages to the world to use them for stock market data. So my parents were tracking exponential moving averages separately of the advanced decline numbers, looking at each of them on their own and then tabulating them on a ledger so that they could calculate them every day. The key insight they had is, what if you look at the difference between two moving averages? So that was what became the McClellan oscillator. To apply it to different markets as you asked how to do that, you need to have the underlying data for advancing and declining issues.

Das ist eine Herausforderung. Heute ist es ein Herausforderer, oder wie Sie das machen? Für die finalen Daten, wir benutzen den Wall Street Journal, weil es sehr clean ist. Es ist auch für alle, und so jemand mit dem Wall Street Journal kann unsere Indikators oder Berens. Berens hat das gleiche Dataset als Wall Street Journal. Schermann, was du denkst, der größte Misunderstand, wenn es um die Werte, der wie die Investoren, das sieht? Market breadth is more reliable than price structure. Price structure is very volatile.

And it is difficult to understand a projection of what's high and what's low. But breadth is limited in the number of issues that there are there. So it can get to overbought and oversold. Und du hast die limits auf was das kann. Der Preis hat keine limits. Und so, bei einem limits auf die Daten, das ist es für uns, gibt es uns, was es besser für uns. Ich würde sagen, dass die Best misconception, dass die Leute haben, ist, dass die Leute interessiert in die S&P 500 sind, dann denken sie es best, to look at the advanced decline data just for the stocks in the S&P 500. This misses the beauty of advanced decline data because you're looking at just the varsity team. You're not looking at everybody.

And it's the lesser quality players that are gonna show you the pain first when there's a liquidity problem. And that's the whole point of looking at breath data is to know when liquidity is good or bad. What are the warning signs that you would be looking for looking at the oscillator or at the summation index that could give you a bit of a pre-warning that situations might change on Wall Street.

Well, divergence is the word you introduced, and that's a very good one. If the S&P 500 or the Dow makes a higher price high, but the cumulative advanced decline line makes a lower high, you have a problem because the majority of stocks are not participating. The advanced decline data that they became so interested in in the 1960s was something almost no one paid attention to before 1962. 1962 saw a 27% decline in the Dow, a big bear market, got everyone's attention. Well, a couple of guys wrote newsletters named Richard Russell and Joe Granville, and they talked in their newsletters about a divergence between the advanced decline line and the Dow Jones Industrial Average. Suddenly that got everyone's attention. There's something that can tell us the answer, that there's a problem before one of these 27% declines. So, it was only then that these obscure newsletter writers who were looking at an obscure indicator that nobody paid attention to, that suddenly got everyone's attention. Looking at this and the fact that we're going to have a very unusual year, 2026, with a wave of IPOs that we have never seen before. SpaceX itself will have a market cap that is about 2.7% of the entire market cap on Wall Street. How do you think that will influence market breadth?

Liquidity is a little bit of a fixed pool. So if there are more players coming, to market, then that does soak up some of that liquidity. However, if you buy the SpaceX IPO with your money, your money is going to go into the hands of the guy that is selling those shares of the SpaceX IPO. So now that guy has that money and he can put it to work somewhere else. So it's not like the liquidity gets destroyed. It just gets repurposed and rearranged and he goes invest in something else. So, es wird sozusagen aus dem Stockmarkt und in die Ökonomie, so zu sprechen. Es ist wichtig, ob das IPO-Mobil an die Firma selbst geht, weil sie eine Faktor zu bauen wollen, oder ob es der Angel-Investor in seinen Händen geht, der dann noch eine kleine Start-up geht, um zu fundieren. Die Liquidität bleibt in den Händen der ersten Investoren und wird recycelt. Es ist also nicht so ein Problem. Die große Überraschung ist übrigens, dass Tom Deutsch spricht.

Du sprichst Deutsch? Nur ein bisschen, ja. Ich habe gewohnt nach Frankfurt vier Jahre mit dem Amerikanischen Army. Sie sind Pilot, Hubschrauberpilot. Hubschrauberpilot, ja. Und Ingenieur. Feel free to switch in English whenever you want, but your German sounds wonderful. At this point, I'm going to switch with Ralf just for five minutes. Yeah, so we started talking to you also from your physics background, engineering background, which we just discussed. And so how would you now bring in cycles into your technical analysis perspective, maybe also from an engineering background or both of you?

In the stock market, the path of prices tends to be very much like a bouncing ball. So you have very sharp bottoms rising and a rounded top and then a sharp bottom, a rounded top and a sharp bottom. Other markets do not behave that way. Gold, for example, is the exact opposite. It makes sharp tops and rounded bottoms and sharp tops. And so when you are in a rally in the stock market, you want to pay attention to acceleration. Because when you are close to that top, it's starting to curl over. The acceleration will change. And so you get the biggest indication of acceleration and a high reading on the McClellan Oscillator early in a rally when the ball is just starting to bounce up from the floor. When you start to get to the top of the arc, the acceleration numbers start to diminish. You see breath divergences. You see lower acceleration or even negative acceleration before you start down. So the key is that the acceleration measurements tell you what's actually happening and you fit that with the cycle analysis to tell you when things are supposed to be happening. So you use also cyclic information and your McLennan oscillator in combination somehow? We take in everything. The book that we wrote describing the McClellan Oscillator is called Patterns for Profit. There are patterns that we see in the market.

Very often there are three tops on the McClellan Oscillator to finish out a structure. Either tops or three bottoms.

And so we can identify those. So people are not so familiar with the McClellan Oscillator. Can you tell us a little bit about how it works? The McClellan Oscillator is calculated as the difference between two exponential moving averages of the daily difference between advances and declines. So you're looking at daily breadth, you're smoothing it with two different speeds of exponential moving averages, and it's that difference between those two moving averages that is the McClellan Oscillator, and that's where you get the indication of acceleration. So a positive reading means that acceleration is upward. A negative reading means that acceleration is downward. And how would you combine the summation index with a McClellan oscillator? The summation index is the cumulative total of all the individual days of McClellan oscillator readings. So when the oscillator is positive, the summation index is going up. And when the oscillator is negative, the summation is going down.

Another way of saying that is that the McClellan Oscillator value is the instantaneous slope of the McClellan Summation NX. So if the oscillator goes down through zero, then the Summation NX will roll over and turn downward. And so the Summation NX is generally going to match the trend of the market with a slight lag, because anything that matches the trend is going to lag just a little bit. But how far the Summation NX can go up and down also tells us useful information that if you have the next two hours, We can give you a long class on how to interpret that. Yeah, the presidential cycle is a four-year cycle, as we know.

And we have a midterm year now. And can you tell us about what does it tell us about the equities going forward in this year, in this midterm election year? We've done quite a bit of work with the presidential cycle, as have others. And it's a very useful tool. It won't give you the perfect answer all the time because it is an average of past behavior. Generally speaking, the first two years of a presidential term are flat. The third year is almost always an up year, but we are now in the second year of a presidential term. And the period from April until mid-October is generally a slightly downward period.

You quite often get bear market bottoms in the middle of the second year of a presidential term. Wall Street can handle Democrats winning. Wall Street can handle Republicans winning. Wall Street cannot handle not knowing who's going to win. And so it's that period in the summer of the second year when investors don't know and they feel unconfident about not knowing that the stock market tends to go down because of that feeling of uncertainty. Do you think that cycle bottoms are more easily to figure out than the tops in the equity market? Definitely. You measure bottom to bottom in the stock market Das hat eine viel mehr Zeit mehr als die Top-to-Top-Measurungen. Und jetzt der obligatorische und barfinsichere Risikohinweis von Mr. Markus Koch.

Meine Damen und Herren, liebe Aufsichtsbehörden, ich darf Sie darauf hinweisen, dass die Inhalte in diesem Video ausschließlich der allgemeinen Information dienen, und keiner Empfehlungen zum Erwerb oder der Veräußerung bestimmter Finanzinstrumente und somit keine Anlageberatung darstellen. Insbesondere können Wall Street Correspondents und der Vortragende nicht einschätzen, inwiefern die im Video gemachten Empfehlungen ihren Anlagezielen, ihrer Risikobereitschaft und Verlusttragfähigkeit entsprechen. Wer also auf Basis von Informationen in diesem Video etwaige Anlageentscheidungen trifft, trifft diese ausschließlich auf eigene Verantwortung und eigene Gefahr. Und das wiederum bedeutet, dass weder Wall Street Correspondents noch der Vortragende, das ist immer noch dieser Mann hier, für Verluste haften, die sie dadurch erleiden, dass sie Anlageentscheidungen aufgrund von Informationen oder Kommentaren in diesem Video getroffen haben. Vielen Dank für die Aufmerksamkeit und weiterhin einen erfolgreichen Handelstag.