Distribution

Distribution is the Wyckoff phase that mirrors Accumulation but at market tops. After an extended uptrend, price enters a trading range where institutional sellers distribute their positions to retail buyers who are still chasing the trend. The range is characterized by failed breakouts, declining volume on rallies, and rising volume on declines.

Canonical events within distribution: Preliminary Supply (PSY), Buying Climax (BC), Automatic Reaction (AR), Secondary Test (ST), and finally an Upthrust (UT) or Upthrust After Distribution (UTAD), a false breakout above range highs designed to trap late longs before markdown. The phase resolves with a Sign of Weakness (SOW), a decisive break below range support. Followed by a Last Point of Supply (LPSY) retest that fails to recover. Trading distribution means shorting UTAD failures or LPSY retests with stops above the swept high.