S&P 500 IndexShort
Upthrust After Distribution (UTAD) or Wall of Worry?
On the 4-hour chart following Jerome Powell’s recent rate cut announcement, the price action was not as strong as expected. While some media outlets labeled this as part of the “wall of worry,” where markets continue climbing despite negative sentiment, I observed signs of a potential Upthrust After Distribution (UTAD) based on Wyckoff’s distribution schematic. The structure of the price, combined with key volume dynamics, led me to question whether this gradual upward movement was a true continuation or a deceptive distribution phase.
Although the price has managed to sit just above the all-time high for multiple days, it hasn’t done so in a particularly strong way. Bearish divergences in the MACD and RSI indicate underlying weakness, and volume has remained light, signaling distribution rather than accumulation. While both a wall of worry and a UTAD can feature a slow grind upward, a wall of worry is typically supported by steady buying. In contrast, a UTAD appears similar but ultimately traps buyers before reversing sharply. The key difference here is the lack of strong follow-through above resistance and the mounting signs of exhaustion.
In conclusion, despite the price holding slightly above the all-time high, the weak volume, bearish divergences, and fragile nature of this level suggest that we are more likely seeing a UTAD than a wall of worry. These factors point to distribution, and I expect a potential market reversal in the near term.
Although the price has managed to sit just above the all-time high for multiple days, it hasn’t done so in a particularly strong way. Bearish divergences in the MACD and RSI indicate underlying weakness, and volume has remained light, signaling distribution rather than accumulation. While both a wall of worry and a UTAD can feature a slow grind upward, a wall of worry is typically supported by steady buying. In contrast, a UTAD appears similar but ultimately traps buyers before reversing sharply. The key difference here is the lack of strong follow-through above resistance and the mounting signs of exhaustion.
In conclusion, despite the price holding slightly above the all-time high, the weak volume, bearish divergences, and fragile nature of this level suggest that we are more likely seeing a UTAD than a wall of worry. These factors point to distribution, and I expect a potential market reversal in the near term.
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