The dashed black line shows the average of each of the past six data points for August 10 since 2007 (in 2008, August 10 was a Sunday, so I used the 11th). The dashed pink line is the simple average of all data points on the chart. August 10 of last year was near the beginning of the meltdown into the October low -- and volume was fairly high. Even if you eliminate that particular August 10, the average is still higher than the pink line of all volume. I think we can safely reject the "summer doldrums" as the reason for light volume during the past week.
The green arrows mark the volume around the Christmas holidays each year, which is almost always a time of light trading. Of the 5 past holiday periods, the moving average of volume went below 100 million shares per day 3 times. The red arrows mark the only other times during the past 5 years that volume dropped below 100 million: the market peak of 2007, and now. Unusually light volume showed the reluctance to buy at the peak in 2007 -- and appears to be showing that same reticence now. Technical analysis is essentially studying the behavior of all market participants collectively.
Fund managers, analysts, and the individual investor can say anything they like, but what their behavior shows is that (except for 3 out of 5 Christmas holiday periods) the only other time they were this reluctant to commit funds was at the peak in 2007. I think this argues rather strongly that we are at or very near to an important market top. The S&P is less than 1% below the high from April 2 of this year. Whether we exceed that peak by a little or not is probably unimportant for this volume study.
Original content: SPY