08 / 10 — MODEL 3: REVERSION
Harmonia Model 3
Failed Expansion → EQ
Reversion
Model 3 develops when an attempted directional expansion loses acceptance and the market begins reverting toward equilibrium.
The important distinction: Model 1 begins around the outer EXT. Model 3 focuses on an expansion attempt that fails to maintain its developing directional structure.
EXPANSION
LOSS OF ACCEPTANCE
STRUCTURE FAILURE
REVERSION
EQ
Look For
Failed directional acceptance
Loss of important Harmonia internal structure
Aggression no longer producing progress
Delta/CVD deterioration
Opposing participation increasing
Price returning into the prior auction
Once an expansion fails, traders who entered late in the directional move can become trapped. Their exits can contribute to the reversion toward equilibrium.
FATBOOK Rule
WHEN EXPANSION FAILS, BALANCE BECOMES RELEVANT AGAIN.
Next: when the pullback doesn't fail — it reloads.
Continue to Model 4: Continuation →