Floor Traders Short Sales Ratio
The Floor Traders Short Sales Ratio is computed by dividing the total floor traders short sales by total short sales. A moving average should be applied to smooth out the swings. Floor traders are normally right about the trend of the market and if they are shorting heavily the market is usually ripe for a correction. On the other hand, if they are doing relatively little shorting it is most likely that the market has hit bottom, especially if public- and odd-lot short sales increase at the same time.
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