Spectre's Journal

what worries me is the 'rescue' price action thats evident in that rectangle. It implies a large buyer is maintaing the trend upwards. If you look at previous trends up in SP500 it was pretty much orderly progression up, there were a lot of 'rescue' gaps. Leads me to believe its all just 'air' and there is no strength in the price structure that led us up here.
 

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here is a chart of GOOG this is a good example of your "harvest idea" early news release, the one minute candle on this was one of the largest I have ever seen. Maybe you can explain the harvest idea, thanks.
 

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Quote from kinggyppo:

here is a chart of GOOG this is a good example of your "harvest idea" early news release, the one minute candle on this was one of the largest I have ever seen. Maybe you can explain the harvest idea, thanks.
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Price action components:

1) incite
2) recruit
3) harvest


the largest money pools can drive price in whichever direction is easiest at any given time. When prices are stable amongst a 'crowd'. Imagine a group of people trading in a pit. Prices are fluctuating within the norms of variance on any given day. A large player or institution steps into the crowd and starts 'inciting' screaming his head off of orders in one direction only. This awakens the crowd and people start to wonder whats up. Further orders come in unidirectionally from the same participant. To front run, a portion of the crow steps in and goes unidirectional also with their bid/ask. Another portion of the crowd goes in the opposite direction, thinking this is crazy, I'm getting such a good deal, the large player keeps the unidirectional orderflow in play. The crowd that went in unidirectional with the largest participant realizes they have unrealized gains on their orders, and add to those orders/position, the crowd that went against the largest participant now see they have unrealized losses, the largest participant continues the unidirectional order flow, eventually the crowd that played mean reversion throws in the towel and get recruited by the largest participant, prices go parabolic and keep going in one direction, now the largest participant uses another derivatives market/options to hedge out without the immediate crowd knowing, or does a 180, when most of the crowd is recruited its advantageous to do the 180 and leave others holding the bag, with the 180 move, the largest participant has taken money from the mean reversion players that are the least solvent. The most solvent mean reversion players hold onto their belief they are right, and prices eventually will revert. Basically the largest player can recruit the market to do his bidding and kill the least solvent mean reversion players. The harvest is the killing of the recruited participants.
 
Even though on the whole the market is much much larger then the largest participant. Herd mentality can recruit the market. The large circles represent large banks/ institutions. The circles on the left are small participants. Combined they are much larger, then the largest players.

Interconnectivity of the larger participants, they move together, since information flow is fastest with the largest and they work in concert.
 

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tools of recruitment

- media (internet, earnings, supply/demand forecasts, upgrades/downgrades)

- technicals (ATR break, high low break, support resistance break) If you break enough of these, you have a buyers or sellers strike. Price inefficiency approaches 100%. Deer in headlights syndrome develops. Losses increase as the participants are frozen instead of getting out.

- price control (algorithmic monopoly, market makers)
 
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