I think that analysis of volume for individual equities is much more important than the widely reported trading volume for the indices. For equities, I first look at volume as a measurement of liquidity to determine whether I want to get involved in the stock. Anything less than 500K shares/day volume is typically where I cut-off my search for trade ideas.
Once I have found a stock of interest, I like to see the general pattern of volume expanding in the direction of the primary trend, followed by lighter volume as the stock experiences a corrective move in that trend. To me, the volume represents the level of emotions (enthusiasm or disdain) the participants have for the stock. Increasing volume in a rally shows motivated buyers, while the lower volume corrective move indicates that there is a higher likelihood that the selling is simple profit taking and typically not the beginning of a reversal lower, and the opposite would be true for a stock in a downtrend. I should point out that volume is a secondary measurement to price action but, it is does provide us with a good insight into the collective psychology of the market participants.
See www.onlypricepays.com for more.