Generally, stocks with good financial position should fare better. Financial stocks eg banks and insurance will fare worse.

Action on the NSE 20 share Index from the 5499 level so far.



Expect a three wave (A, B, C) move this month to complete wave [2] as depicted on the chart.

Wave A should terminate at approx. 5100.

NB. There is a possibility of one more drop below 4786.74 before wave A commences.

Good social mood in the air ....... New CBK Governor, CBK Monetary meet, National Budger in the cards, KES contained etc. Rebound in the cards!!!

@mnandii why not label the three wave in small caps (a,b,c) so that it looks like a smaller wave

Yes. Wave C back up to somewhere below 5499. Once waves A and B complete we will be able to estimate where wave C ends with better accuracy.

Since we know that the Kes should strengthen against the USD in the coming months (70s and above), can we now use socionomics to predict the kind of news we should expect? The answer is yes!

We know the caliber of the incoming Central Bank gov. (how smart! ). We also expect a monetary policy meeting soon. By the monetary policy meeting date or immediately thereafter, Kes should strengthen tremendously against the USD. Of course the Central bank, with its bright new leader, will be credited with saving the currency!

This coincidence of monetary policy meeting, election of a new central bank governor and strengthening of KES will re-inforce the conventional thinking that events (central bank action) determine the value of financial assets when the truth is the other way round.

Am saying this since, even before the policy meeting, we have determined, via Elliott waves, that the KES should strengthen against the USD.

When you see news such as the one I suggest above do ask yourself what came first: central bank action or evidence of strengthening shilling via Elliott Waves.

Interestingly, the shilling was ''teflon'' again last week and since a heavy-duty intervention the previous week at 99+ and closed last week below 97.00. Now given the backdrop I have just described where the dollar is king, I am not sure how long the shilling can hang tough. Certainly, the appointment of a substantive Central Bank Governor [finally] will be helpful but these are seriously choppy waters. The MPC has called ane mergency meeting and market participants are expecting a 100 basis point increase. In these environments, I have found that the markets are ''red in tooth and claw'' and you start by giving them a 100 basis points, the market will want 500 basis points, in the blink of an eye. I am not convinced that the economy is running away and a rate hike at this point [or a series of them in an attempt to defend the shilling] might just cut the legs from underneath us. Look around and tell me what is booming. Tourism has cratered. Q1 earnings at the Nairobi Securities Exchange have turned softer, in the main. Making money too tight to mention at this juncture will have serious knock-on effects.

I am afraid, i believe the dollar has now achieved escape velocity. Therefore, in my view, the trend is your friend and there is going to be more blood in the water.
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