Is a low level of stock-trading volume warning of a new major downleg for the U.S. market? Some of the bearish advisers I monitor are worried that it might be, on the grounds that volume is a leading indicator and New York Stock Exchange trading volume has been trending lower. As you can see from the chart below, the five-day moving average of NYSE volume currently is a third less than where it stood in mid-December.

You can relax. I was unable to detect any relationship in the historical data between trends in price and volume, at least since 1972 (which is how far back I was able to obtain data).

To be sure, measuring the impact of lower trading volume is anything but straightforward, since trading volume has grown steadily over the years. To overcome that long-term uptrend, I calculated for each month since 1972 a ratio of its NYSE trading volume to the trailing 12-month average. I then measured whether that moving average was correlated with the S&P 500’s

SPX, +1.32%

 return over the subsequent month-, quarter-, six months-, and one year.

I came up empty. Nothing emerged that was even remotely significant at standard levels of statistical significance.

Another factor complicating any straightforward analysis of volume is high-frequency trading, which has come to increasingly dominate the exchange’s volume numbers. JPMorgan Chase recently estimated that only about 10% of trading volume represents “fundamental discretionary traders,” in contrast to automated trades.

What do academic researchers have to say on the subject of volume and price? Blake LeBaron, a finance professor at Brandeis University, has taught me that one of the most distinct volume-related patterns in the stock market is that high-volume days also tend to be days with high volatility. “But it’s not clear which came first.”

This pattern to which LeBaron refers is evident in the accompanying chart. Volume’s peak came on Dec. 24, a day of extraordinary volatility when the Dow Jones Industrial Average

DJIA, +1.38%

 plunged more than 650 points. But it’s not clear whether the high volatility is what caused the high volume, or vice versa.

In light of this pattern, perhaps we should be glad that trading volume is so much lower than in December. In any case, as LeBaron points out, trying to use volume as a market indicator is a “tricky business.”

The bottom line? There‘s plenty for investors to worry about. But if low trading volume is among them, you probably can let that one go.

For more information, including descriptions of the Hulbert Sentiment Indices, go to The Hulbert Financial Digest or email .

More: Stocks and bonds have gone their separate ways but could they be getting back together?

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