@VVS- the NSE20 historical data is up to 1997. From this 18yr data the chart pattern is as shown below.

@mnandii, SPT, sparkly the trendline break down is worse than I thought!!! There is a long term trendline (14yr) from the 2002 low in August which was the pin off for the Kibaki bull. This trendline has also been broken by the 2015 selloff! We may need to start preparing for a longer bear period! May be for 2 - 3yrs of sideways market action as the market tries to find a floor. A lot of wanjikus will flee from the investor forum towards club SK.

2 - 3yrs of accumulation will be paradise for value investors @aguy, VVS will your wallets be able to buy continuously for 3yrs

Strong support lies around 3000 - 3300 level as well as 2300 - 2500. If these are breached it's an airpocket all the way towards 1900 then 1400!! Unless there is a war I don't see these levels printing.

@hisah [Please bear with me coz I am no Chartist] Shouldn't the rise start since the index has breached the trendline that started from the lowest point of 2002 and subsequent low points?
As a fundamentalist - in a good way non-threatening way - I see the 'weakness' as a reaction to the poor economic fundamentals.
1) High short-term [T-Bill] rates coupled with good IFB/T-Bond rates means many investors would prefer the risk of certainty of high rates over the uncertainty of 3% dividends & possible capital appreciation of shares.
2) Those who borrow [or use margin] for shares/investment will cut back substantially as interest rates rise. Also firms that want to do takeovers need to weigh the cash returns/costs vs the purchase of another firm.
3) Revenue & profit growth are often driven by expansion but this will be dialed back as costs increase. Some may even sell productive assets.
Kenol isn't expanding as much as it could as it pays down debt. Total without the support of Papa Total would be in deep trouble.
ARM will face headwinds when the Convertible Debt comes due i.e. potentially a larger dilution than Paunrana expected.
Tranny is screwed coz who is going to lend/give them money to pay off the Bond?
KQ's expansion plans are on hold despite the cash from Afreximbank & GoK. Sale of Embakasi land.
EABL selling off land & Central Glass to reduce debt.

BTW, for those cash-rich firms, the future is bright. High interest income, the ability to buy assets on the cheap, muscle out competition thanks to working capital.

I think the destination is the same for both our approaches. I am trying to figure out why you say you can time whereas I have utterly failed to time the inflection points.

Not any soon Blame it on Eurobond & the IMF loans in USD. So brace yourself for a long spell of high interest rates. I see the thread on Tbills is quite active. We had warned guys during the bull in the maxed out thread about this. And we will see post 25% on T/bills. People should forget ever seeing the dollar at sub 100!

You will be well buying 91day T/Bills. & rolling over if the yields are going up .As soon as the yields start falling ,you can jump back into Equities .Buying season will be long.

Treasury is in a fine mess. Kra will most likely collect sub one trillion in revenues for the current financial year. We have upwards of 600b due in 2016. So before you factor in both domestic and international deficit funding, we only have 400b(at best) to fund both recurrent and development expenditure.

External debt will be sought at a bigger premium courtesy of the latest downgrade and more downgrades will quickly follow meaning more expensive debt.

Domestic debt aka tbills and bonds are also getting unmanageable by the day. Going by the latest trend of the government sucking up any money thrown at it means the rates will be heading north.

How they will pay back all these debts while facing dwindling revenues and at the same time finance the budget is a mystery.

Deflation makes debt very nasty/pronounced so cbk will have to play a trick shot( genius of the governor notwithstanding, this may not be achievable) or print money.

I actually expect the dollar at sub 100.

Bingo! We are actually in the very early stages of a big mess which alot of people don't see. Their limbic systems prevent them from seeing the big picture. People will panic when it is too late.

With the bear market underway it is time we did some Socionomic forecasts. This exercise may appear frivolous but it shows the utility of The Wave Principle and Socionomics. The character of social events can be predicted and this may mean the difference between life and death; economic well-being and financial ruin.

THE EXPECTED CHARACTER OF EVENTS IN WAZUA IN THE ENSUING BEAR MARKET:

1. Increasingly many wazuans will be 'usered'.

2. Wazuans will increasingly attack each other viciously in posts.

3. Lady wazuans are more likely to start/comment on threads

4. Technical analysts whose posts are bearish will face increasing attacks.

5. In the political sections distinct camps will emerge with sharply divided ideologies esp. Pro jubilee Vs Opposition.

6. Many wazuans will become deeply religious.

7. admin will have a difficult time moderating discussions.

8. Increasing number of wazuans will start/increase consumption of alcoholic beverages.

9. The number of wazuans visiting coffee shops ( Java House, Dormans etc) will reduce.

10. Several vocal commentators on stocks will become silent or increasingly and openly hostile.

11. Obscenities in posts will increase.

12. Small differences of opinion will escalate.

13. The popularity of violent sports e.g. football and boxing will increase.

14. Many more wazuans will regard the government as being incompetent.

15. Discussions of gossip/scandals will increase.

16. Increasing number of wazuans will become superstitious.

Watch to see an example of what happens when a stock market goes down vs when it goes up.