Which of the following statements about contrary-opinion and smart money technicians is CORRECT?
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A. B. C. D.C
When the CBOE put call ratio is equal to or greater than 0.50, this suggests that investors are bearish and thus contrary-opinion technicians are bullish.
The other statements are incorrect. The mutual fund ratio is not an indicator for smart money technicians. When the mutual fund ratio is equal to or greater than
0.13, it means that investors are bearish and contrary-opinion technicians are bullish. The statement beginning, "When the yield spread on high quality versus lower-quality bonds narrows," is partially true. A narrowing yield spread is a bullish sign to smart-money technicians, but because it means that the confidence index has increased.
Summary of the indicators for contrary-opinion and smart money technicians:
Contrary-opinion technicians (trade the opposite of the mass of general investors):
Smart-money technicians (follow the professional investors):