The Cumulative Volume
Index (CVI) is a momentum indicator highlighting whether money
is flowing into or out of the entire stock market. It is calculated
by subtracting the volume of declining stocks from the volume of
advancing stocks, and then adding this value to a running total.
The CVI uses the actual up and down volume from the NYSE. Divergences
between the CVI and the market index generally presage a correction.
Day traders may find it of limited use except as a 'warning' signal
that the 'smart money' may be up to something. To calculate the
CVI, subtract the volume of declining stocks from the volume of
advancing stocks, and then add this to yesterday's CVI..