The Balrog

[Tuor in Gondolin]

I believe Gandalf even made a comment about announcing his presence.

My impression is that Gandalf's observation referred to lighting the wood on Caradhras (where it probably did not alert anyone to his presence).

[QUOTE]'If there are any to see, then I at least am revealed to them,'
he said. 'I have written Gandalf is here[ in signs that
all can read from Rivendell to the mouths of Anduin./QUOTE]

On the general topic here, one of PJ's movie errors was to picture
all evil as directly controlled by Sauron. It's far more complicated,
interesting, and realistic to have a number of autonomous forces,
for good and evil, with possible alliances. On the bad guy side
including Sauron, Shelob, Smaug, Caradhras, balrogs, and some orcs.

It is interesting to speculate on relative powers vof Durin's Bane vs.
Third Age (ringless) Sauron. And this is another reason for Sauron's
desire for the Ring. Even if Sauron took out Gondor, Rohan, and the elves
he'd still have major concerns handling balrogs, any remaining dragons, etc.
And it's one thing to gain military victories, another to govern the mass
of Middle Earth (of which Eriador and Rhovanion were only a fraction).

Ample room for the valar and Iluvatar to eventually engineer his downfall,
certainly without the Ring available for Sauron. The temptation (except for
the Nine) to seek their own power base would be enormous. Consider that
a Moria defended only by dwarves withstood Sauron throughout the Second
Age, how much more could a Moria defended by a balrog and his
minions do?