Wyckoff Distribution Schematic

What is the Wyckoff Distribution Schematic?

The Wyckoff Distribution Schematic is the mirror of the Wyckoff Accumulation Schematic: the idealized map of how an uptrend is ended and a markdown prepared. Phase A stops the advance: preliminary supply (PSY), a buying climax (BC), an automatic reaction (AR), and a secondary test (ST) define the range. Phase B builds the cause, typically with failing pushes at the highs (upthrusts). Phase C often ends with an upthrust after distribution (UTAD), a final probe above resistance that fails. Phase D turns the range heavy: signs of weakness (SOW) break toward support on expanding volume, and last points of supply (LPSY) form as weak rallies. Phase E is markdown.

In the older Wyckoff teaching story, the range's support is nicknamed the ice: a sign of weakness that falls through the ice, followed by a feeble rally back to its underside, is the classic prelude to markdown. As with accumulation, the schematic is a sequence to recognize, not a script. Distribution and re-accumulation can look alike for most of a range, so phase C and D behavior, meaning failed upthrusts, weak rallies, and expanding down-volume, carries most of the diagnostic weight.

How traders use it

• As a phase locator: label PSY, BC, AR, and ST to frame the range, then watch whether rallies keep failing at or above resistance while down-swings gain volume.
• As an entry framework: the classic shorts are the UTAD in phase C and the LPSY rallies in phase D, with stops above the relevant high and a sign of weakness as confirmation.
• As protection against premature reads: mid-range, distribution resembles re-accumulation, so Wyckoff practice withholds the bearish label until the range actually produces signs of weakness and failing rallies.