A decline in this ratio below 30 percent is bullish, above 50 percent is bearish.
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A. B. C. D. E. F. G. H.Explanation
The normal ratio of specialists' short sales to the total amount of short sales on the NYSE has become about 40 percent. Technicians view a decline in this ratio below 30 percent as a bullish sign because it means that specialists are attempting to minimize their participation in short sales. In contrast and increase in the proportion above 50 percent is a bearish sign.