Weekly Newsletter - Nov 6 2009

Fear seems to gain more credence than greed these days. Volatility has escalated as traders and investors get cautious after a stupendous rally that began in early March. Corporate earnings and economic activity have show signs of improvement but there remains some apprehension about immediate prospects.

The sentiment will remain at the mercy of global cues and trend in fund flows. Stock-specific activity will continue depending on the news flow on corporate and economic data. Inflation and inflationary expectations coupled with concerns over overheated valuations and possible asset bubbles could keep a lid on the gains.

Central banks across the globe have at least started thinking in terms of when and how to withdraw the extraordinary stimulus measures without causing much upheavals. How they devise and execute their so-called "exit" strategies remain to be seen.

So, stick to basics as uncertainty and volatility are not going to go away in a jiffy. Don't buy into anything aggressively and don't forget to do your due diligence before picking up stocks. Though, there is no need to panic with the long term outlook positive, booking profits in the short term will enhance your portfolio.

Stocks could remain under pressure on Monday as the monthly jobs data in the US has come in worse than forecast. The October unemployment rate surprisingly climbed as high as 10.2% against average expectations of 9.9%. US firms shed 190,000 non-farm jobs versus prediction of 150,000.