NVI tracks price only on days when volume falls — the footprints of smart money. PVI tracks it only on days when volume rises — the crowd. Read the long-term regime by each line's position relative to its own moving average.
NVI (Negative Volume Index) and PVI (Positive Volume Index) are a paired set of cumulative indicators that split the market into two worlds along the boundary of rising versus falling volume.
The idea traces back to a volume-counting method developed by Paul Dysart in the 1930s. Norman Fosback systematized it in his 1976 book Stock Market Logic, arranging it into the form used today.
A single hypothesis runs through both indicators:
Money moving quietly on low-volume days is "smart money"; money piling in on high-volume days is "the crowd."
If you accept this premise, then collecting only the price action of days when volume fell reveals the footprints of professionals, while collecting only the price action of days when volume rose reveals the frenzy of the amateurs.
NVI accumulates the former, PVI the latter. Unlike OBV, which stacks every day by direction, NVI and PVI place their entire thesis in the filter that decides which days to look at.
How to Read
NASDAQ:AAPL
Members Only
Full access is reserved for members of the library.