Series 7 - General Securities Representative Exam

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The Nasdaq 100 Index has been going up steadily and constantly. A technical analyst notices that the number of stocks that are advancing as compared to the number declining of declining issues is beginning to decrease. Which hypothesis might he make about this market?

The market has high volatility
The put call ratio is increasing
The VIX index is up; so the market is expensive
The market is overbought


The technician may conclude the market is overbought as the A/D line is decreasing. This means that fewer stocks are participating in the rally. There is no information about volatility or options. The VIX pertains to the S&P 500