DEFINITION of 'Cumulative Volume Index - CVI'

The cumulative volume index, or CVI, is a momentum indicator that gauges the movement of funds into and out of the entire stock market by adding the difference between advancing and declining stocks to a running total.

BREAKING DOWN 'Cumulative Volume Index - CVI'

The cumulative volume index is a breadth indicator that shows the direction of a market or index, such as the New York Stock Exchange or S&P 500 index. While its name makes it sound similar to the On-Balance Volume indicator, the difference is that CVI only looks at the number of securities rather than looking at their volume, similar to the Advance/Decline Index.

The cumulative volume index can be calculated as follows:

Cumulative Volume Index = Prior Period's CVI + (# of Advancing Stocks - # of Declining Stocks)

When reading the CVI, it's important to note that the actual number doesn't matter since it's not normalized (it's just a running total). Traders and investors should instead look at the CVI's trend over time relative to the index's price to interpret its meaning.

Many traders and investors also use CVI in conjunction with other forms of technical analysis, such as chart patterns or technical indicators, rather than using it as a standalone indicator. By doing so, they increase the odds of a successful trade by looking for confirmation of trends and reversals.

Using the Cumulative Volume Index

The cumulative volume index is used to determine whether capital is moving in or out of an index. If the CVI is trending lower, traders might assume that a trend is losing momentum and a reversal could be around the corner. If the CVI is trending higher, traders might assume that a trend is gaining momentum and it might be time to trade alongside the trend.

At the same time, traders may also look for divergences or convergences between the price and CVI trend lines. Highs and lows made in the price that aren't reflected in the CVI readings may be a sign of a weakening trend and upcoming correction. 

Cumulative Volume Index Example

The following chart shows an example of a cumulative volume index applied to the SPDR S&P 500 ETF (NYSE ARCA: SPY).

Cumulative Volume Index Chart Example

In the chart above, you can see that the CVI increases between December and February before moving sharply lower as the market sold off. The CVI then trended sideways in February and April before slowly trending higher in April through June.

Chart courtesy of

  1. Cumulative Dividend

    A cumulative dividend is a sum that companies must remit to preferred ...
  2. Volume Analysis

    Volume analysis is the examination of the number of shares or ...
  3. Toraku Index

    A technical indicator that compares the number of advancing stocks ...
  4. Accumulation/Distribution

    An indicator that tracks the relationship between volume and ...
  5. Up Volume

    Up volume generally refers to an increase in the volume of shares ...
  6. Ease Of Movement

    The Ease of Movement technical indicator shows the relationship ...
Related Articles
  1. Trading

    Essential Strategies For Trading Volume

    Looking to trade using volume? Have a look at these essential tips.
  2. Trading

    How to Use Volume to Improve Your Trading

    Volume is a simple yet powerful way for traders and investors to increase profits and minimize risks.
  3. Trading

    Interpreting Volume for the Futures Market

    Learn how to read the volume reports, look at the relation to liquidity and interpret volume.
  4. Trading

    Confirming Price Movements With Volume Oscillators

    Use this indicator to validate a change in price direction and moving averages.
  5. Investing

    Fidelity Magellan Fund Performance Case Study (FMAGX)

    Discover the seasonal performance trends of the Fidelity Magellan Fund, and learn which periods are the best and worst times for investment.
  6. Trading

    Introduction To The Arms Index

    Developed in 1967 by Richard Arms, this volume-based breadth indicator can be applied over various time periods.
  7. Trading

    Top 7 Technical Analysis Tools

    Technical indicators determine the direction of an asset’s momentum and whether that direction will continue. Here are seven used most.
  8. Trading

    Trend Trading: The 4 Most Common Indicators

    Learn about the top indicators and tools trend traders use to establish when trends exist and find entry and exit points.
  1. What are the main differences between momentum and trend?

    Learn to differentiate between trend and momentum, two seemingly similar concepts central to the understanding of technical ... Read Answer >>
  2. What are the pros and cons of using the S&P 500 as a benchmark?

    Learn about the advantages and disadvantages of using the S&P 500 as a benchmark for portfolio performance, and understand ... Read Answer >>
  3. What technical tools can I use to measure momentum?

    One of the main goals of every trader using technical analysis is to measure the strength of an asset's momentum and the ... Read Answer >>
  4. What is a common strategy traders implement when using the Money Flow indicator?

    Learn a common trading strategy traders implement with the money flow indicator to identify profitable trade entry and exit ... Read Answer >>
  5. What is the Volume Price Trend Indicator (VPT) formula and how is it calculated?

    Understand the significance and usefulness of the volume price trend indicator and learn the formula for calculating the ... Read Answer >>
Hot Definitions
  1. Gross Margin

    A company's total sales revenue minus its cost of goods sold, divided by the total sales revenue, expressed as a percentage. ...
  2. Inflation

    Inflation is the rate at which prices for goods and services is rising and the worth of currency is dropping.
  3. Discount Rate

    Discount rate is the interest rate charged to commercial banks and other depository institutions for loans received from ...
  4. Economies of Scale

    Economies of scale refer to reduced costs per unit that arise from increased total output of a product. For example, a larger ...
  5. Quick Ratio

    The quick ratio measures a company’s ability to meet its short-term obligations with its most liquid assets.
  6. Leverage

    Leverage results from using borrowed capital as a source of funding when investing to expand the firm's asset base and generate ...
Trading Center