Negative Volume Index

What is the Negative Volume Index?

The Negative Volume Index (NVI) is a cumulative line that changes only on sessions when volume falls below the prior session's volume. On those quiet days the line moves by the day's percentage price change; on rising-volume days it stays flat. Created by Paul Dysart in the 1930s and refined by Norman Fosback in 1976, it rests on one premise: the crowd trades the loud days while informed money positions on the quiet ones, so price behavior on falling-volume days is worth isolating.

The absolute level is arbitrary (the line is usually seeded at 1000), so NVI is read by slope and by position against a long average of itself, conventionally a one-year (255-day) EMA. Above the average is treated as a healthy primary trend; below it, as quiet-day distribution. It is a slow, regime-scale tool rather than a timing signal.

How traders use it

• As a long-horizon trend filter: NVI above its one-year EMA supports a bullish bias, and a cross below is a caution flag that gains weight when other breadth or volume evidence agrees.
• Paired with the Positive Volume Index: NVI rising while PVI stalls is read as accumulation without crowd participation, and the two agreeing (both above or both below their averages) is the stronger classic configuration.
• As a divergence input: NVI trending down while price makes new highs flags that quiet-day flows are leaning against the tape, the same logic as OBV Divergence applied to a filtered subset of days.