Distribution Days

How to count heavy-volume down days on an index, why a cluster of them warns of institutional selling, and what the counts looked like at real 2025 and 2026 peaks.

The definition

A distribution day is a day when a major index falls by a meaningful amount, commonly 0.2% or more, on higher volume than the day before. The idea is that big investors are selling into the market, and their size shows up as heavier volume on down days.

Most traders count distribution days over the last 25 trading sessions, about five weeks. Older ones drop off the count. Some also remove a day from the count once the index has risen about 5% above that day’s close, since the selling has clearly been absorbed.

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