To ensure consistency in labelling with our long term chart, I have also updated the wave counts in this short term chart.



So there we are.

We have our impulse wave drop from 5499 level in March and with wave counts (i) (ii) (iii) (iv) and (v) making up minute wave [i] at 4744.66.

We now have wave (a) at 4906.07 and a developing wave (b), which has already broken below the low of our impulse. This suggests that the entire wave [ii], which should consist of waves (a) (b) and (c), will be an expanded flat. We therefore expect wave (b) to bottom soon and our wave (c) to move up above 4906 level.

An alternate count would suggest that wave [ii] is already complete at 4906.07 and we are now falling in wave [iii]. There is a level which, if broken, would suggest that is the case. See below:

Number Crunching:

Length Wave [i] = {5499.64 - 4744.66} = 754.98

Length Wave (a) = {4906.07 - 4744.66} = 161.41

So wave (a) was close to Fibonacci 23.6% of wave [i].

Since we expect a flat, we can predict a target for wave (b) as shown below.

B waves of expanded flats are usually 123.6% of the A wave.

Therefore:

123.6% of 161.41 = 199.50

Subtracting this value from the end of wave (a) gives us:

{4906.07 - 199.50} = 4706.57

And we don't expect wave (b) to be more than 138.2% of wave (a).

138.2% of 161.41 = 223.07

Thus, wave (b) should not go below: {4906.07 - 223.07} = 4683

As stated before, if 4683 is broken to the downside then we'll know that we are in the wave [iii].

SUMMARY:

NSE 20 Share Index is expected to bottom at (or near) 4706.57 then start a powerful move up in wave (c).

Nairobi bourse sheds 3 percent value in a fortnight

And breaks below 4700 handle.

Banking H1 results will be out soon. SCBK already hiked by a massive factor its provision for bad loans in Q1. Will the rest do so in H1? CBR has been hiked 35% as Q3 (July started) together with a KBRR hike. This will start reflecting in Q3 which feeds into the H2 period as the FY ends. Watch out for NPL curveballs for they'll definitely spike. Next is the bonds portfolio. Will the same trick like in 2011 be used again? Bonds for income changing to mark to maturity instead of mark to market to hide losses? Financial engineering aka book cooking aka creative accounting will be back with a bang in the financials sector. You'll need a keen eye to see the magic to avoid those stocks

As for remaining hopeful bulls, sit tight. I'm relying on you to trigger that sizable selloff in order to reset frothy valuations to sweet discounts.

For those attending the golden handcuffs class wish you all the best in learning the lessons. There is no hurry. If you don't pass you'll repeat the class till you graduate. But truth be told, many quit this class (market) now, which is the best time to learn!