Swiss SMI at All-Time Highs*! Its worth pausing..
*All time high ('ATH') on a Total Return basis (dividends reinvested)
1. SMI has rallied an incredible 4% month to date, 7% in 30 days.
2. 'ATH's are defined as a tops set and not surpassed for several quarters to years.
2. We distinguish between rallies below the 'ATH', and rallies above 'ATH'.
3.a. Rally to the 'ATH' (from below) can continue similar momentum for a couple more weeks,
3.b. Rally above the ATM tends to be marked by greater volatility, and pullbacks following on average 3 to 4% gains. We are in the latter.
4. The last 'ATH' was followed by a 14% pullback.
5. Relative Strength at extreme overbought.
Trade idea: Short, but with a stop x% above current level to mitigate a further upswing. Up to you to decide x!
1. SMI has rallied an incredible 4% month to date, 7% in 30 days.
2. 'ATH's are defined as a tops set and not surpassed for several quarters to years.
2. We distinguish between rallies below the 'ATH', and rallies above 'ATH'.
3.a. Rally to the 'ATH' (from below) can continue similar momentum for a couple more weeks,
3.b. Rally above the ATM tends to be marked by greater volatility, and pullbacks following on average 3 to 4% gains. We are in the latter.
4. The last 'ATH' was followed by a 14% pullback.
5. Relative Strength at extreme overbought.
Trade idea: Short, but with a stop x% above current level to mitigate a further upswing. Up to you to decide x!