Contrarian investing is an investment style in which investors go against prevailing market trends by selling when the crowd is are buying and vice versa. A contrarian investor believes that certain crowd behavior among investors can lead to exploitable mis-pricings in the markets.
The bull/bear ratio indicates overall investor sentiment in the market by comparing the number of bullish and bearish investors. The ratio is a contrarian indicator in that a bull/bear ratio > 1 indicates conditions are too bullish and you should take a bearish stance and a bull/bear ratio less < 1 indicates conditions are too bearish and you
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