I just read a discussion on the web about volume. Specifically, it was about the lack of volume on a particular stock's breakout but it makes total sense for the market as a whole, too.
With all the off-exchange activity, ECNs and the mysterious dark pools (cue spooky music), it seems that volume as an indicator is going the way of the specialist on the floor. Its not that volume does not matter but the way it is reported is not working any more.
There goes all those volume based indicators. It was bad enough when we lost the power of tick based indicators like tick and money flow (birinyi/worden) when they went to pennies. Sayonara to cumulative volume and that other money flow I never figured out anyway (zweig?).
So, now we know how the market rallied for five months on shrinking volume statistics.
One more reason we need an overhaul on technical analysis.