SMO Exclusive: Status Change, -73% Market Strength Score 2025-02-21 (Risk Off)

Brian Degracia

23 Feb 2025 • 3 min read

The Market Strength Score is changing rapidly and this indicates it is trying to find direction.

Current Market Status

Risk Off because the current Stock Market Organizer Market Strength Score is NEGATIVE at -73% as of Friday 2025-02-21 (scale is -100% to +100%).

This reading is considered not stretched so there is room for it to continue moving downward.

The previous change to positive/risk on was Wednesday 2025-02-19.

This reading can fall to -100%. See this post for information on two times it has reached that level - at the end of the Great Financial Crisis and the Covid-19 crash. There is not nor can there be any realistic expectation as to what a continued fall from the current reading to -100% would translate to in index readings.
This is not a prediction as to what will happen. It is merely a measurement of current market status after the close of trading Friday 2025-02-21.
While not a prediction, two things can be true about this environment: 1) it can provide a springboard to attractive returns, and 2) it can be a precursor to cascading declines. As always, manage your risk appropriately for new and existing positions.

Below is today's corresponding Sector Risk Gauge.

Current 2025-02-21 Sector Risk Gauge, indicative of a -73% Market Strength Score. The underlying objectively measured change depends on the strengthening and weakening of the component industries and sectors.

Past Extreme Weak Readings

The current environment may degenerate into similar ones shown below. Or it may rocket to new highs. More likely, perhaps, it will do something between these two extremes. Which relates to the intent of this analysis - to objectively and in a repeatable manner measure where between the two possible extremes is the market currently. From there I never make predictions. I simply act logically based on what is, not what will be, with a paramount focus on risk management.

March 9, 2009, Great Financial Crisis:

March 16, 2020 (Covid):

Underlying Key Concepts

🔹 Signal duration depends solely on objective market action measurement.
🔹 It conveys what “is” – not “why,” or for how long.
🔹 It is an objective, repeatable, and reliable tool to

enforce discipline,
prevent unforced errors,
eliminate emotion and confusion, and
make sound decisions in all market environments.

This enforced discipline ensures new positions are opened only in the direction of market strengthening or weakening.

If strengthening, only new long positions can be opened.

If weakening, only new short positions can be opened.

Why? Trend respect.

Market weakening does not mean “exit existing long positions.” Only potential new positions are impacted by the critical question of “what is the market doing now?”

Existing open positions are exited when their behavior negates the entry thesis.