If I go by your theory, then I will have to believe that, if we see higher number of long positions taken, there are similar numbers of short position takers on the other side of the trade! Is that correct? So what you are saying that each position is self balancing! Am I understanding it correctly?

It is not the case in day trading market and it doesn't signal bulling or bearing trend. This particular trend of positions is valid for futures market only! Futures contract comes with an expiry date. If the contract holder wants to square off his position before that expiry date, he will have to find a buyer from the market. It is not necessary to have an opponent party for a futures contract with an expiry date. So if you see more numbers of short position taken in the futures market, it signals a bearing trend and vice versa. Hope this explains your question!