The main Swiss equity indices made daily scale bottom extensions yesterday. This probably means that the recent weakness in Europe will now end so we should stop playing defensively and 'step up' our bullish approach. If you are not long, now is the time to take new long positions.
Switzerland has performed quite like other European markets over the last six months, following a drop from weekly-scale compressions that formed late lat year (first chart). This new bottom extension has the usual shelf-life of about three weeks but its effects could easily last longer. The fact that the drop ended in the area of an old daily-scale compression adds some significance because we expect support in such circumstances. We will watch and advise.