By adding up all of the daily values of the McClellan Oscillator, one can produce an indicator known as the McClellan Summation Index. It is the basis for intermediate and long term interpretation of the stock market's direction and power. When properly calculated and calibrated, it is neutral at the +1000 level. It generally moves between 0 and +2000. When outside these levels, the Summation Index indicates that an unusual condition is taking place in the market. As with the Oscillator, the Summation Index offers many different pieces of information in order to interpret the market's action.
Among the most significant indications given by the Summation Index are the identification of the end of a bear market and the confirmation of a new bull market. Bear markets typically end with the Summation Index below -1200. A strong rise from such a level can signal initiation of a new bull market. This is confirmed when the Summation Index rises well above +2000. Past examples of such a confirmation have resulted in bull markets lasting at least 13 months, with the average ones lasting 22-24 months.
The book 'Patterns for Profits' offers detailed analysis of the logic and thinking behind McClellan Summation Index and if you are serious about your trading, I highly recommend this book.
Patterns for Profit
This is the original book written by Sherman and Marian McClellan in 1970, introducing the McClellan Oscillator and Summation Index to the world. The McClellans were encouraged by the late P.N. Haurlan, publisher of the Trade Levels Report newsletter, to share their findings with others and this 54-page booklet was the result. It covers the calculation and interpretation of these indicators, as well as the meaning of the chart patterns which they form.
Comes with 40 years of chart history comparing the McClellan Oscillator and Summation Index to the DJIA.
You can read more about the index here.
Later: The Investor's Business Daily method for calling market turns
Barron's as against Investor's Business Daily or Why methodology trumps opinionated bearishness