Since the market's closing low on March 10th, volume has been anemic. This has led many to complain that the current rally lacks staying power and is nothing more than a sucker's rally. While the ultimate outcome of this rally is up for debate, the weak volume argument is weak. At least part of the decline in volume can be explained by seasonal factors.
In the chart below, we show the daily volume on the New York Stock Exchange [NYSE] versus its 50-day moving so far this year. We also created a composite yearly chart of NYSE volume versus its 50-day moving average using data since 1926. As shown, while volume has been drying up leading up to this Summer, volume usually trends lower from early January through the end of the Summer.
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Thanks!