Ease of Movement
Volume & money flow
Richard Arms' EMV measures how easily the price moves: if the stock covers a lot of ground on little volume, the road is clear. If every cent of gain costs enormous volume, there is heavy resistance.
In its original form this indicator uses volume and/or the daily range (High/Low). The scanner only has closing prices and approximates those inputs (see the note at the bottom). So treat the absolute values as indicative; the direction and the crossings remain usable.
Construction & calculation
- Distance Moved = the midpoint of today's daily range minus that of yesterday.
- Box Ratio = the volume divided by the daily range.
- EMV = Distance Moved / Box Ratio, then smoothed over 14 periods.
Distance = (H+L)/2 (today) - (H+L)/2 (yesterday)
Box Ratio = Volume / (H - L)
EMV = SMA( Distance / Box Ratio, 14 )
Interpretation
- High positive EMV: the price rises easily, with little volume resistance — a healthy, smooth upward move.
- EMV around zero: the price barely moves, or it moves only on very high volume. In both cases: no clear road.
- Strongly negative EMV: the price drops effortlessly. Buyers are absent.
How the signal works in this scanner
Buy signal (green)The EMV crosses the zero line from below to above: the price starts rising easily.
Sell signal (red)The EMV crosses the zero line from above to below.
Watch-outs & pitfalls
- Very jumpy by nature; the smoothing over 14 periods is essential but slows the signal.
- Works best on liquid stocks with a normal volume pattern.
- Requires at least 40 trading days.