SMI: the Swiss stock market struggles to regain height

The SMI could continue to move up and down pending the US elections, but the outlook remains bullish.

The SMI struggles to rebound from important support at 11,850 points

The SMI has been having difficulty regaining height since the beginning of September after having corrected to the bottom of the ascending channel in which it has been oscillating for almost a year. The flagship index of the Swiss stock market is struggling to rebound from this technical level, which is attractive to buyers, which reflects low buying pressure.

The recent low at around 11,850 points, from which the SMI rebounded in September, will be extremely important in preserving a bullish outlook in the short term. A decline below this threshold would also mean an exit from the bottom of the channel, and would therefore pave the way for a greater retracement of the index. The next major support to watch would be the low at the beginning of August at around 11,500 points, reached during the last fears of recession in the United States.

SMI Price Daily Chart – Key Levels

The SMI could rebound after the US presidential elections

The upcoming data on employment and inflation will be crucial for the evolution of risky assets in the medium and long term, especially the US figures. Figures in favor of soft-landing would support the SMI and vice versa.

That said, the market could continue to move up and down in the short term while awaiting the outcome of the US presidential elections in early November. During the two previous US elections (2016 and 2020), stock markets tended to move without trend in the weeks preceding the elections, then rebound strongly the next day.