Ads,Thanks for the reply. Again I'm no technical expert but I...

Ads,
Thanks for the reply. Again I'm no technical expert but I understand some basis. Looking at your chart couldn't you could draw similar downward volume trends at OND08, AMJ09, JAS10 during bullish markets? What do you say about these periods given these periods were followed by further bullish moves?

Looking further back through weekly charts of 2005-07, there are plenty of volume trends like the one you highlight that have been followed by the overall bullish market of this time not skipping a beat - at worse a sideways move. The period 15/03/2009 - 09/08/2009 saw a massive decrease in weekly volume on DJI (~2.5bn - ~1bn) but this was the most bullish market we've seen in recent times and market maintained the rally after this downturn in volume.

Looking all the way back to 1998 the pattern I see short sharp moves down in volume are often indicators for a significant drop off but even that is very inconsistent. Just as frequently large drops are preceded by average or high volumes, but on a weekly basis and a longer term average.

Explaining away these events by appealing to fundamentals (ie QE2) only adds more weight to my view that volume is but one indicator. No doubt it's one to watch, but imho this indicator alone does not offer much in the way of reliable predictions. Counter points welcome.