Diminishing volume..is there a problem ?

We witnessed a noticeable drop in the overall traded volume today...is this a one off
phenomena or a beginning of yet another "new average daily volume"...it was not
so long ago that we had daily volumes of about 1.3 billion shares and even then we were
lamenting about the lack of volume and market activity...When it dropped to range between
800 m to a billion a day the last few months we were even more discouraged...after awhile
we sort of "grow accustomed to it '' another way of saying "we cannot do a thing about it ,take it
or leave it " ...and today we are yet confronted with a new low..Is this a new "trend' ?Do we then sit back
and not trade or invest at all and wait out this winter season ? Of course this should not be the case..can
you imagine if everyone adopts the wait and see attitude ....the preferred strategy would be to tailor
your trades or investments in line with the reduced market activity...but before we do that we need to
know and understand the implications of a low volume environment...So what does it really mean other
than the frequently quoted reason ie" lack of market confidence..." In practical terms  low overall volume may affect the following..

a ) reduced market making activities..although not a bad thing per se but this can affect retail participation
     which in turn affects stock liquidity..illiquid stocks can result in heightened volatility eg normal contra
    selling alone can result in severe drop in prices which in turn further dampens confidence...

b ) hinders corporate exercises..a healthy volume and accompanying confidence will enable share rights
     for instance to be actively traded without which the cum rights price may not be attractive enough for
     investors to subscribe...similarly share placement exercises which are important for raising capital may
     have to be postponed or cancelled...

On a more general basis ,low volumes simply equate a marginalised market which is not conducive in
attracting foreign investors...and this vicious cycle can in turn cause a even more severe drop in volume..

Or perhaps today is a one off phenomena and everything goes back to "normal' tomorrow...We shall see...