Exhaustion
Situation in which a majority of participants trading in the same asset are either long or short, leaving few investors to take the other side of the transaction when participants wish to close their positions. Exhaustion signals the reversal of the current trend because it illustrates excess levels of supply or demand. Investopedia Says:
Traders can identify periods of exhaustion by looking at the Commitments of Traders Report. This report is published every week and shows levels of open interest in the futures markets. An excessively high number of long contracts could indicate that everybody who wishes to be long has already taken a position, leaving few investors to buy these assets back at a higher price. Related Terms:
Commitments of Traders Report - COT
Demand
Demarker Indicator
Disparity Index
Futures Market
Long
Open Interest
Reversal
Short
Supply |