Mark-Down Phase
Volume Spread Analysis glossary · Wyckoff Phases & Schematics
Definition
The fourth phase of the Wyckoff market cycle, in which the stock distributed to weak holders during the prior range is now marked down as professional support is withdrawn. Bear markets fall faster than bull markets because there is no professional buying to cushion declines. Characteristic signals include wide-spread down-bars on expanding volume, low-volume rallies (no demand), tests that fail to produce up-moves, up-thrusts on rallies, and consecutively lower highs. Weak holders refuse to sell during early declines, hoping for recovery — this delays capitulation but makes the eventual selling climax more explosive.
Mark-Down Phase in plain English
The mark-down phase is the actual crash that follows distribution: once the pros have sold, they stop supporting the price, and with no big buyers to cushion it, the stock falls — usually faster than it ever rose, because fear moves quicker than greed. It's like removing the safety net under a tightrope walker; there's nothing left to catch a fall. You'll see wide, heavy down-bars, feeble low-volume rallies that fizzle (no real demand), and a staircase of lower and lower highs. One human quirk deepens it: early on, trapped holders refuse to sell because they're hoping for a rebound — which only bottles up the pain until they finally panic all at once in an explosive 'selling climax.'
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