Technical trading rules, contrarian view: “Falling credit balances mean normal investors are bullish, so contrarians will be bearish and sell. Rising credit balances mean normal investors are bearish, so contrarians will be bullish and buy” Technical trading rules, smart money view: “Debit balances in brokerage acct represent the level of margin trading, which is usually only done by knowledgeable investors and traders. An increase in debit balances would indicate an increase in purchasing by astute buyers. This is bullish sign for smart money technicians. A decline in debit balances would indicate astute traders are selling stocks. This is a bearish sign for smart money technicians.” I don’t understand much above two view of T.A. Some don’t-understand-problems are following: 1. The object of each view, contrarian view concentrate on “normal” investor but smart money view pay attention to astute traders? Does two view mention different kind of persons? Does it mean that investors are long term investors and traders are short term investors? 2. Are above two view nearly the same in term of object that technician pay attention to? 3. As smart money view, if there is bullish sign when there is an increase in debit balances of brokerage account the smart money technician will sell his shares, right? Or technician will enter to buy shares? I am not too much clear because the study note doesn’t mention technician action this case. If I get any wrong understanding, pls kindly give me your simply but clear explain. Yr commends are very high appreciated.
Are there anyone there on the board please kindly explain me? Or at least tell me why there are any answer? Are those so naive questions or too basic that nothing to explain? I am waiting for your commends to help me release my misunderstanding.