Exhaustion

AAA

DEFINITION of '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 EXPLAINS 'Exhaustion'

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
  1. Short (or Short Position)

    1. The sale of a borrowed security, commodity or currency with ...
  2. Commitments of Traders Report - ...

    A report published every Friday by the Commodity Futures Trading ...
  3. Disparity Index

    A technical indicator that measures the relative position of ...
  4. Demarker Indicator

    An indicator used in technical analysis that compares the most ...
  5. Futures Market

    An auction market in which participants buy and sell commodity/future ...
  6. Long (or Long Position)

    1. The buying of a security such as a stock, commodity or currency, ...
Related Articles
  1. The Seven-Day Extension Fade
    Forex Education

    The Seven-Day Extension Fade

  2. Using Open Interest To Find Bull/Bear ...
    Options & Futures

    Using Open Interest To Find Bull/Bear ...

  3. Intro To Open Interest In The Futures ...
    Options & Futures

    Intro To Open Interest In The Futures ...

  4. Forex: The Moving Average MACD Combo
    Forex Education

    Forex: The Moving Average MACD Combo

comments powered by Disqus
Hot Definitions
  1. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  2. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  3. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  4. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  5. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  6. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
Trading Center