A technical analyst might use credit balances in brokerage accounts as follows:
A) Sell stock when credit balances rise
B) Buy stock when credit balances rise
C) Sell stock when credit balances decline
D) b and c
E) None of the above

Question

Quizplus · Accepted Answer

A technical analyst might interpret rising credit balances as a sign that investors are holding cash, potentially indicating a future buying opportunity (B). Conversely, declining credit balances might suggest that investors are using cash to buy stocks, which could be a signal to sell (C).

A Technical Analyst Might Use Credit Balances in Brokerage Accounts