Steve, you have definitely air trapped in the system and the ONLY way to remove it is to use a power brake bleeder, the one from Motive Products is excellent. check it out at: http://www.fcpgroton.com/volvo850brakes.htm
I'm not familiar with Valvoline Synpower synthetic brake fluid but it should be
rated "DOT 4" or "DOT 4 +". I'd suggest the Super Blue Racing from ATE
available at FCP Groton as well. I own 2 bricks and I'm bleeding my brakes every year on both cars using this bleeder & the Super Blue Racing fluid and
I never encountered problems.

Here's a procedure:
Turn ignition switch to Off position, then raise and support vehicle.
Clean area around brake fluid reservoir cap, then remove cap.
Connect bleeding unit to brake fluid reservoir. Follow manufacturer's instruction for connecting and operating bleeding unit.
Depress brake pedal several times to remove any air bubbles from clutch master cylinder.
Remove dust cap from bleed nipple on one of the rear wheels and connect hose from overflow bottle.
Open bleed nipple, then close and tighten nipple when no further air bubbles can be seen in fluid flowing out. Remove hose and replace dust cap.
Bleed other rear wheel, right front wheel, then the left front wheel using procedure described in steps 4 through 6.
Remove bleeding unit connector from brake fluid reservoir, then check to see if there is air in system by depressing brake pedal with a force corresponding to an abrupt braking. Pedal travel must not exceed 1.574 inch (40 mm) and warning indicator on dashboard must not flash or light up.
If pedal travel exceeds limit, bleed system again and check pedal travel again.
Ensure that fluid level is not over Max mark, then lower vehicle.

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Jack