Which of the following represents a "contrary opinion" technical indicator? Choose the best answer.
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A. B. C. D.B
Contrarian technical analysts often examine the opinions of market participants, including investment advisors and futures speculators, for insight into the overall sentiment of securities professionals. Believing these individuals to be inaccurate in their forecasts, contrary opinion technical analysts assume the contra-side opinion. So said, a high degree of bullishness amongst investment advisors is viewed as bearish by contrary opinion technical analyst. Conversely, a high degree of bearishness amongst investment advisors is viewed as a bullish signal by contrary opinion technical analysts. In this same light, a high degree of bullishness amongst stock index futures traders is viewed as a bearish signal by contrarian technical analysts, and a low degree of bullishness amongst stock index futures traders is viewed as a bullish signal.
The Confidence Index, a "smart money" technical indicator, is a measure of yield spreads between high-grade corporate bonds and the yields on average corporate bonds. The Diffusion Index measures the breadth of the market, and is found by taking the total volume of advancing shares plus one-half of the issues unchanged, divided by the total number of issues traded.