Trading rules of volume:

• High volume confirms trends. If prices rise to a new peak and volume reaches a new high, then prices are likely to retest or exceed that peak.
• If the market falls to a new low and the volume reaches a new high, that bottom is likely to be retested or exceeded. A "climax bottom" is almost always retested on low volume, offering an excellent buying opportunity.
• If volume shrinks while a trend continues, that trend is ripe for a reversal. When a market rises to a new peak on lower volume than its previous peak, look for a shorting opportunity.
• Watch volume during reactions against the trend. When an uptrend is punctuated by a decline, volume often picks up in a flurry of profit taking. When the dip continues but volume shrinks, it shows that bulls are no longer running or that selling pressure is spent. When volume dries up, it shows that the reaction is nearing an end and the uptrend is ready to resume. This identifies a good buying opportunity. Major downtrends are often punctuated by rallies which begin on heavy volume. Once weak bears have been flushed out, volume shrinks and gives a signal to sell short.