Market Health

What This Dashboard Measures

Market health is not just price. A single large-cap stock can drag or lift a major index while thousands of other stocks move in the opposite direction. This dashboard measures market breadth — the underlying participation of stocks across the entire market — to give you a more complete picture of conditions than price alone.

The Market Health Score

The composite score (0–100) aggregates five inputs: the McClellan Oscillator (MCO), advance-decline breadth across major indices, VIX-derived sentiment, sector rotation signals, and momentum indicators. A score above 60 generally reflects broadly healthy conditions; below 40 reflects deterioration. This is an educational composite — not a precise buy or sell signal.

McClellan Oscillator (MCO)

The MCO measures the difference between two exponential moving averages (19-day and 39-day) of the daily advance-decline figures across the NYSE or NASDAQ. When more stocks are advancing than declining over recent weeks, the MCO is positive. When more are declining, it is negative. Readings above +100 indicate broad buying pressure; readings below −100 indicate broad selling pressure. Divergences — where the index makes a new high but the MCO does not — are historically early warning signs of distribution.

McClellan Summation Index (MCSI)

The MCSI is the running cumulative sum of the MCO. Because it accumulates over time, it behaves more like a trend indicator than an oscillator. An MCSI above +500 is associated with bull market conditions where pullbacks tend to be buyable. An MCSI below −500 reflects sustained selling pressure where rallies tend to be sold. Watching the MCSI cross from negative to positive territory — called a breadth thrust — is considered one of the more reliable medium-term buy signals in technical analysis.

Advance-Decline Breadth by Index

Each major index (NYSE, NASDAQ, Dow, NASDAQ 100, SPY) has its own advance-decline ratio, measured daily. Seeing all five indices show positive A/D ratios simultaneously indicates broad participation in a rally — a much stronger signal than SPY alone being up. If SPY is green but the NYSE A/D ratio is below 1.0, the rally is being driven by a narrow subset of large-caps, which has historically resolved in broader weakness within days to weeks.

How to Use This Dashboard

This tool is designed for educational context — understanding the current market environment before making strategy decisions. A trader using a momentum strategy (such as a breakout) should check whether MCO is positive and MCSI is above zero before committing capital. A trader considering a contrarian or mean-reversion trade should check whether sentiment extremes (VIX spike, very negative MCO) are present. No single indicator should be used in isolation.

Data sourced from yfinance and Finviz. This page is for educational purposes only and does not constitute investment advice. Past market conditions do not guarantee future results.