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Strategies & Market Trends : MDA - Market Direction Analysis
SPY 652.53-1.5%Nov 20 4:00 PM EST
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To: Doo who wrote (34657)12/3/1999 4:40:00 PM
From: John T.  Read Replies (1) of 99985
 
Definition of Exhaustion Gap --

"The Exhaustion Gap. The final type of gap appears near the end of a market move. After all objectives have been achieved and the other two types of gaps (breakaway and runaway) have been identified, the analyst should begin to expect the exhaustion gap. Near the end of an uptrend, prices leap forward in a last gasp, so to speak. However, that upward leap quickly fades and prices turn lower within a couple of days or within a week. When prices close under the last gap, it is usually a dead giveaway that the exhaustion gap has made its appearance. This is a classic example where the filling of a gap in an uptrend has bearish implications."

Quoted from Technical Analysis of the Futures Markets by John J. Murphy, 1986 Edition, page 101

EDIT: Just like Heinz described in the prior post. Also, to see gaps, take a look at the 1-hour charts of DIA, SPY and QQQ.
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