One of the analyses we run every night is a count of Feeder stocks on the S&P 500. Feeder Stocks are stocks that are Very Strong or Very Weak with extreme strength levels. By measuring both ends of the spectrum, one can see the shifts in "the balance of power" between the Bulls and the Bears.
However, looking at two opposite kinds of data can be confusing if they bounce around a lot. That is when doing a "net calculation" is good, because it is the change of direction and value of the net differential that tell's the real story.
To see the actual swings and movements of the Very Strong and Very Weak Feeder stocks please see the first chart below.
Now ... see what the "net calculation" looks like when plotted against the NYA Index by looking at the second chart.
This chart show's the "net calculation" of the Very Strong and Very Weak Feeder stocks as of the close on June 26th..