Investing.com - Trading volume in the S&P 500 ETF (NYSEARCA: SPY) fell to 22.6 million shares on Friday, the lowest level since December 24, 2019, which was a half-day trading session, according to BTIG. For full trading days not bordering stock-market holidays, Friday's volume was the lowest since October 11, 2004. Monday is on pace for even lower volume around 19 million shares, which would mark the lowest non-holiday volume since 2003.

BTIG attributes the decline to the calendar, as markets are in a lull between major macroeconomic data releases and earnings season. The firm notes that investors are waiting to see banks start reporting later this week before making new decisions. NYSE Composite Volume showed a less extreme reading, with Friday's volume below its 20-day average but above levels seen in August.

The five-day moving average of SPY volume is likely to finish Monday around 31 million shares. Since 2005, the 5-DMA has fallen below 35 million only three other times: early December 2024, mid-February 2025, and late August 2026. SPY fell 5% into mid-January 2025 after the December 2024 low, dropped 21% following the February 2025 reading, and declined 2.9% into mid-September after the August 2026 period.

The S&P 500 has not experienced a 1% down day in 52 trading days, tying the streak that ended in July 2024. If no 1% decline occurs Tuesday, it will be the longest streak since January 2020, which lasted 74 days. The NYSE has not seen an 80% or higher downside volume day in nearly a year, the longest streak since at least 1996.

BTIG says each of the prior three low-volume periods saw SPY weaken shortly afterward. The firm expects both volume and volatility to increase as earnings season begins.