All language subtitles for 6. Exhaustion Gaps

Oh, look at this, Kitty here, so tired, so exhausted, and that's we're going to talk about his

exhaustion caps when they start to run out of steam.

So what is an exhaustion gap?

Well, it's all part of these uncommon gaps that we've been talking about.

But the exhaustion caps occur at the end of a trend.

And really what they're signalling is things are going to start changing or the party's over.

It's starting to and we're getting exhausted.

So what's being exhausted is the news or whatever's happened to propel the energy of the early buyers

that drove the security up in the first place, let's say if it's an upward exhaustion grab.

Right.

So you might have had a breakout gap that change and made it go up, let's say, is a breakout.

You might have had a runaway gap that continued that trend keeping going forward.

But some point it runs out of steam and has maybe another gap in prices where you see what's called

an exhaustion gap.

You know, it's kind of like that one last buyer after, you know, a buying frenzy is over.

There's like one last person and it starts to kind of go the other way.

That's an exhaustion gap.

So let's look at the exhaustion gap in relation to what we've been looking at in the other types of

gaps.

So if we continue with this chart pattern here, you see we talked about our breakaway gap and we talked

about our runaway gap and that created the breakaway crap gap.

The trend and the runaway gap continues that trend.

But then the trend started to run out of steam.

And we have an exhaustion gap here.

We have that kind of last buyer or buyers jumping up, creating a new gap, saying this is so exciting.

You know, the trends, great.

Let's drive these prices even higher.

And you see where they start to kind of run out of steam there and you start having what would become

an exhaustion gap where you have that gap.

And then like these sixteen, you know, we're going to start having overlap.

We're going to start seeing that coming back down is what would happen in an exhaustion gap.

One way you can tell with that, too, you know, what's the how do we know it's an exhaustion gap versus

a runaway gap or how to be aware of that?

Because maybe that exhaustion gap is just another runaway gap we don't look at is you're going to have

low volume on an exhaustion gap and you're going to have high trading volume on a runaway gap.

So you think about your volume, how many people are actually trading things?

If we look at the bottom of this year, you can see on day twelve where we had that real high spike

in volume.

That means a lot of people want to get in on the security on day twelve there.

And they drove that price up.

And then that kind of continues from there where if you see a gap like this, exactly what's going to

become an exhaustion gap, you're going to see the where the volume starts, you have your gap, but

then you see that the volume actually is actually pretty low.

Again, that's an indicator that there's in this example, less buyers out there.

There's a couple of the last one who's willing to pay these premium prices, but it's kind of really

run out of steam and is becoming exhausted.

So that means the the party's over, so to speak.

Right.

And so this you're now going to have some overlap.

You're now going to have maybe the security start trading sideways or maybe even start to reverse and

start going on a downtrend.

So when you're trying to decide, am I looking at potentially a runaway gap or an exhaustion gap, look

at that volume there and what's been going, you know, typically with the volume on that particular

security, you know, leading up to this, and if you see a spike in volume, then it's a gap in this

case could be breakaway excuse me, a runaway gap or in any security would have high volume with a breakaway

gap to look for.

But exhaustion gap can be real telling when there's already been established, very established trend

and the trend is ending.

And that's because you're seeing some low volume there.

So you're watching that volume there when you're trying to decide am I seeing a runaway gap or exhaustion

gap and being ready to make a change?

You know, either way, whether you look at where that trend is going to then change your head and get

out if it's appropriate, if it's an exhaustion gap.