At the end of each trading day, we measure how many stocks have positive strength and how many have negative strength.

We do it on the S&P 500 for two reasons. One, is that it is regarded as the best proxy for the state of the economy by the large Institutional Investors. Two, it is because it only has 500 stocks, and therefore, 250 stocks is the half-way equilibrium point when measuring the balance of power.

Today will be a free courtesy day because we will share this daily chart posted on our subscriber site.

What you see on this chart, says that the balance of power slightly favored the Bears on Friday. There were 238 stocks with positive strength, and 262 stocks with negative strength. So ... the negative stocks had the advantage, and the trending (see the chart) since September has deteriorated because it has shown a down trend for stocks with positive strength. The bottom line? The deterioration is saying that this is a danger point and a time to be VERY cautious.

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