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Negative Volume Index

Negative Volume Index
NSA - Negative Volume Index

Category: Volume indicator

Negative Volume Index focuses on days when volume decreases compared to the previous day. The premise is that the smart group all-knowing investors' positions on days when volume decreases. The Negative Volume Index thus shows the activity of the professional investors.

The PPI (Positive Volume Index) gives just the activity of the non-professional investors.

The NVI and PVI should especially be optically analyzed. The author has Fosback associated table developed over a period of 35 years of test results. The Negative Volume Index PPI & give signals by their position relative to the one year moving average (eg 52 weeks in one week graph) according to the following table:

Indicator Ind compared MA Bull Market Bear Market
NVI above 96% 4% MA
PVI above MA 79% 21%
Negative Volume Index under MA 47% 53%
PVI under MA 33% 67%

In the 1st part of the graph are the NVI and PVI is above both its 52 weeks average. The chance of a Bull Market is in the above table 96% for the Negative Volume Index and 79% for the PPI. The market is very bullish.

calculation of Negative Volume Index
The Negative Volume Index changes only by the following formula as the volume of the last period is less than the volume of the last period. When the last volume is higher than the last period of time than for the Negative Volume Index does not change.

NVI NVI = yesterday + (((closing price - price yesterday) / rate yesterday) * Negative Volume Index yesterday)

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