The Positive Volume Index(PVI) is the companion to the Negative Volume Index(NVI). They are used to identify bull and bear markets.
The PVI makes the assumption that the uninformed crowd dominates trading on active days. On days when volume increases, the crowd-following "uninformed" investors are in the market. The PVI displays what the not-so-smart-money is doing just as the Negative Volume Index displays what the smart money is doing.
The Negative Volume Index(NVI) and the Positive Volume Index (PVI) are developed by Norman Fosback and published in his book “Stock Market Logic” dated 1976.
Calculation:
PrevVolume = The previous volume
PrevPrice = The previous price
PrevPVI = The previous value of the indicator
Inputs:
Price Field = Close
Indicates Open, High, Low or Closing price.
Indicator Type: Market Strength