Trading volume on the New York Stock Exchange has been light this month, very light. There has not been much trading activity in the traditional equity exchanges, back to pre-crises levels.Not surprisingly the activity has been on the Chicago Board of Exchange (CBOE). This is significant because trading volumes are part of a set of what is known as Technical Indicators, tools of the traders. The decline in equity trading could signal a few things, that the recent rally is losing momentum, a demographic shift is reducing demand for equities, there has been a decline in speculative trading, and/or more activity is taking place off the tape.The tape refers back to the old days when everything was on a ticker tape that streamed from a special printer that spewed tape at a faster rate when trading volumes spiked. This is back in the Dow Days. The Dow Jones Index was the first index of stocks and started in the early 1900s. It is a price-weighted index, versus the contemporary market cap weighted.The Dow Jones Industrial Average (DJIA) is still one of the most quoted Indexes today, despite its flaws. An entire school of thought developed around the Dow Theory and the then infant investment market. Some of this theory is still in play.To put it simply, the change in direction of stock prices and trading volumes are indicators of the next direction the stock market will take. From there, an investor can position to make a profit. There is a primary trend signaling a major market trend.There is also a secondary trend to signal corrections. Primary trends signal an upward or a downward trajectory. There are three upward patterns, accumulation, participation, and excess. In a downward direction, the patterns are distribution, participation and panic. The last we know all too well. The amount of stocks trading and its trading volume will confirm whether the trend is your friend.The volume is the number of shares that trade typically on a daily basis. It will be affected by the number of shares that a particular company has outstanding. Therefore, volumes are not comparable between different shares. Likewise changes in stock prices when not viewed as percentage change are not comparable.Therefore, trading volume signals the ‘liquidity’ of the stock, how often and how many shares trade. When volume increases, it signals an increased interest in the stock, whether good or bad.There can be increasing volumes as stock prices rise or when they fall. Early last century it was not possible to short a stock and benefit on its decline, but it is today. The market dynamics are significantly different.Nonetheless, when there is rising trading volume along with rising stock prices , it was thought to be a good thing in the Dow days. If volume was light with upward prices, the indicator was ambivalent. The trend lacked conviction or would trade in a range. Likewise, decreasing volume with declining prices meant a change was near. When volume was high with declining prices, it signalled downward momentum for the market. The peak to trough metric is significant for the Dow Theory. When the level of top to bottom of a range was growing, the market was in a break-out range.The current indicators point to a possible consolidation in the US markets or a change because the volumes are low and now the index values have been trading in a corridor. That is not surprising with the amount of political risk due to the US debt ceiling struggle, along with the hold-your-breath phase of earnings reports.This next month or so is when corporate America updates the world as to its economic conditions, good, bad, or ugly. Many investors are in a wait-and-see mode.There may be other larger trends in play. The demographic shift with millions moving from working to retirement means that their investment philosophy should also become less intense and take a break from equities. In part what boosted the demand and activity in equities in the late 1900s was the tremendous number of people saving for retirement.The growth in equities was somewhat a positive feedback loop. The more money that went in, the more was invested and prices rose. Now that pattern has reversed like the change in magnetic polarity. What was positive is negative, hence the bond rally.Another factor impacting the trading volumes is the missing speculative traders. Where have they all gone? These ‘high-frequency’ traders used to provide the basis of the liquidity in the market. They were out there day-trading to their hearts’ content.As daily volatility in stock prices has declined, so has their profits and interest. Also, the proprietary trading desks of many of the large brokerage companies have been shuttered. Those trading desks are collecting dust or have been sold. Therefore, some of the random noise in the trading day has diminished.Much activity has moved to block trading or Reg144A transactions. May they be government or sovereign investment groups or large institutions, they trade large blocks of stock between friends so to speak. The institutional trading can be arranged as ‘crosses’, like handshakes.The Bermuda Stock Exchange is a pre-eminent venue for institutional crosses. They are private agreements which are much more efficient to transact for the large institutions trading blocks of stock. Crosses are a good thing.Finally, there are dark pools, the black holes of the investment universe. These dark pools are where trading activity that takes place outside of the usual reportable trading world. These are investment entities that work their trading activities in such ways as to advert detection.There are questions afoot, however, on what the dark pools are up to and their impact on the markets. It is a relatively new phenomenon that is changing the dynamics of the market and the validity of the existing techniques of the trade.It is a new millennium and hold-over strategies from the early 1900s may not be as relevant. Some are still broadly used, including the Dow Theory and technical indicators. Stock trading volumes and rates of change give an idea of what the herd is up to. Moving day averages and relative strength indicators do provide some clue.The modern dynamics of the market are much more complex. The current lack in trading volume on the US exchange may be due to Spring Break or a wait-and-see additude.