1 Markets: OK October but Rough & Tough November ahead
October to continue lending support to Equities and OIL, Current week/fortnight to be the
most crucial and exiting period to be watch out for in 2009.
November: Toughest period to be in equities (not because it will fall, but because it will be
extremely choppy, volatile, and trade sideways and with 80-85% of our daily turnover
coming from F&O segment, November is not the month to be equities), USD to slip further,
GOLD, Bond prices to rise, Indian Rupee to strengthen further during November.
IIP Data rally over; now back to reliance on news flow (on earnings and macro data) from the
developed world especially US
One day rally, thankfully mainly due to stupendous IIP numbers duly supported by strength in
European markets and positive US markets futures but this macro data in my view was just one
day affair. I continue to believe that Indian market will react to India centric important macro
news only for that particular day and then continue their reliance on movements witnessed in
developed market especially US. Throughout past week, developed market continued their
upward journey, wherein our markets moved in tight range (sideways) with high volatility.
One thing to notice during last ten days sideways movement for our markets was that on most
of the occasion markets opened higher, traded in a tight range before giving away all of their
gains by closing. The reason being that the market has become extremely short-sighted and tries
to find clues from everything on a day to day basis, such as Asian market closing around noon,
European markets futures and then till market closing, US markets futures etc., as if our
markets leg had been fractured and it needs support to even walk. Fortunately, IIP numbers
supported by good economic news coming out of west, strong European markets and positive
futures data for US Indices, led today’s rally of ~2.25% on leading index on both the exchanges.
Now going forward at-least for the next two weeks, I continue to expect Equities to move
sideways, though with a strong positive bias, due to Earning season and continued good news
12th October, 2009
flow on macro front but continued debate over Interest rates, Inflation, currencies and
subsequently flight to safe heavens might make markets volatile.
With US indices touching new 2009 high (the base becoming higher), even a single % move is
termed as “RALLY”. This rally in US & European has not been sharp in the last 10-12 days, but
has come in-between sideways movement in the market. This slow rally on the back of
sideways movement having positive bias in US & European markets have come even before the
Vinit Tulsyan http://vinittulsyan.wordpress.com

2 Markets: OK October but Rough & Tough November ahead
actual earning season has began. Though, the signs of better than expected earnings were
delivered with the result of ALCOA. Fortunately, the Chinese markets opened the next day i.e.,
after long week holiday and metals & miners took the Chinese index up by more than 5%. The
other index which is almost entirely co-related to Chinese indexes did not react on the day
despite big move in Chinese indexes. The reason being, it has already rallied almost 3-4%
during the week, when Chinese markets were shut.
October to continue lending support to Equities and OIL (on the back of stronger expected
economic recovery reflected in equities strength), Current week/fortnight to be the most
crucial and exiting period to be watch out for in 2009.
With this week full of earning by majors, who were most troubled by economic & financial
turmoil, Bank of America, JP Morgan Chase, CITI, Goldman Sachs, apart from technology major
NOKIA, IBM, INTEL, and GOOGLE and others such as Johnshon & Johnson etc. I am no expert
on US markets, but am absolutely sure that earnings of each one of the company alone has the
ability to move the markets worldwide either ways.
Better than expected earnings by US majors in store; Jim Cramer, CNBC: Going by one the
most sensible market voice on US markets, Jim Cramer, who has said that “the banking
industry, thanks to a tremendous amount of consolidation, is at the beginning of a multiyear
turnaround.” Cramer predicted JPMorgan and BofA would “blow away the numbers. As for
Citi, analysts expect a loss, but Cramer is looking for a gain. If that’s the case, then the stock
should move closer to his $12 price target for 2012. Carmer also expects J&J and Abott Labs, to
report “great numbers”. He expects Intel to produce better than expected earnings, and as for
GOOGLE, he expects the company to report “monster earnings”, thanks to its continued
poaching of advertising away from print and the renewed spending on ads as a whole. Cramer
12th October, 2009
thinks GOOG is working its way to $600 a share. One earning which Cramer is watching is CSX
(an international transportation company offering a variety of rail, container-shipping,
intermodal, trucking and contract logistics), as he feels that this company has its fingers on the
pulse of global economy. As per cramer, market’s next leg, up or down, will depend largely on
what this company has to say about the present business environment, at home and overseas.
“CSX knows the truth,” Cramer said. “They will teach us.”
Vinit Tulsyan http://vinittulsyan.wordpress.com

3 Markets: OK October but Rough & Tough November ahead
Good earnings, stocks outperformance and continued occasional positive macro data flow;
providing continued confidence that recovery is on its way, in my expectation would lead
OIL to make new highs may be crossing 78-80 USD
Earning season in India: I continue to believe that it’s insignificant; markets in India and all
around the globe to find cue from earnings reported by US majors
Earnings followed by important macro data announcement during the earning season, will lead
the markets in the near term. Though, I have observed that this is not particularly true for
Indian Markets. Despite so much of aura being created for Indian earning season, I have
observed that it’s the results delivered by US majors, which ultimately ends up driving Indian
Markets, not our own companies results. There might be few exceptions here and there but
largely, I continue with my strong stance (since 10thMarch 2009) that Indian Markets on the back
of less or no news (barring one or two occasion (like today stupendous IIP numbers), to which
Indian markets reach only for couple of hours or only during that day) will continue their
reliance to news flow arising out of developed economies (especially US), not necessarily
developing economies.
What better example for this than earnings reported by IT major Infosys, reporting much
better than expected numbers, stocks opens high, and then ends the day down almost 1.5%.
Reliance Industries unexpectedly announces 1:1 bonus, stocks opens up almost 4%, than
gives up 3% and closes up by only 1%. Indian stocks (especially Index majors) have this
tendency to either react positively or negatively immediately after earnings announcement
12th October, 2009
but then move in tandem with market, rather than moving markets due to either positive or
negative earnings report. I expect the same to continue, but the good thing here to watch is
that on the back of positive earnings coming out of US healthcare, financial and technology
majors will most probably keep the Indian counterparts in the same sector in the positive
territory, which could further be supported by strength in broader markets.
Vinit Tulsyan http://vinittulsyan.wordpress.com

4 Markets: OK October but Rough & Tough November ahead
November (at-least first 2-3 weeks) in my opinion will become the toughest/roughest market
to be in
From an Indian or global market perspective, markets during November (at-least first two
weeks) will be the toughest and roughest market to be in. I do not expect the market to witness
a significant or drastic drop over October levels but the choppiness, sideways movement
along with volatility will make markets absolutely difficult to trade in, specifically, Indian
markets, where more than 80-85% of daily turnover comes from Futures & Options. The
choppiness, sideways movement and volatility will be a combination of various factors, such as
search for safe heavens by investors all around the globe. I expect GOLD to be an
outperformer during November on the back of further slippage in USD. The belief stems
from the fact that once the euphoria around earning season ends, and the debate on Interest
rates (reverse in federal banks policies all around the globe; obviously led by Federal
Reserve) and subsequently on Inflation takes center stage.The sideways movement coupled
with volatility could have positive bias into it, meaning at the end of the period, I feel markets
will be higher than where it stands today. The caveat is that there might not be huge difference
than today’s level (not at-least the kind of difference one has witnessed in between March and
end of September).
INTEREST RATES and CURRENCIES to become the biggest reason for the equities markets
to move SIDEWAYS and become VOLATILE; leading to money moving into Safe Heavens as
well i.e. GOLD, TREASURIES. The reason above leads me to believe that GOLD and
TREASURIES will be in focus during this time period.
Excerpts from my article dated 29th September, titled “Earning Season, Movement in Interest
12th October, 2009
rates and Inflation to make markets move SIDEWAYS and VOLATILE in near to
medium term”.
INTEREST RATES and CURRENCIES to become the biggest reason for the equities markets
to move SIDEWAYS and have VOLATILITIES; leading to money moving into Safe Heavens
as well i.e. GOLD, TREASURIES (higher bond prices).
Vinit Tulsyan http://vinittulsyan.wordpress.com

5 Markets: OK October but Rough & Tough November ahead
I personally believe that once the euphoria around earning season ends in developed economies
and in India, debate and focus on action to be taken by the federal banks all round the globe
with respect to Interest rates and subsequently its impact on INFLATION will take center stage.
And the speculation around reversing the low interest rates policy by federal banks (especially
US, followed by European economies) and subsequent expectation of an inflationary
environment in the medium to longer term will make markets volatile and move sideways (but
with a positive bias).
GOLD: Expected to be in limelight in wake of increasing debate over Interest rates, inflation,
sliding USD and subsequently in search of safe heavens
Even though Gold is up 17% Year-to-date, I continue to believe that Gold will further
strengthen and should emerge as one of the safest alternative investment avenues going
forward. The confidence stems more from the debate building around investors concerns over
Inflationary environment somewhat on the back of rising interest rates going forward and its
position as a perfect hedge against currency and being projected as emotional trade. (Refer my
article on Gold: Golden Fortune, dated March 8, 2009). A continuing weakening USD will
further attract more investors (including treasuries around the globe in order to safe guard
deteriorating investment in USD denominated assets), which should keep GOLD firmly in
limelight in coming days.
Excerpts from my article on Gold: Golden Fortune dated March 8, 2009: “I strongly believe
that GOLD will continue its shine in years to come, though the caveat is that it might not see the
sharpest of run (in price terms) it has seen in recent times. But increased attention by Investors
(both domestic, international, sophisticated investors etc), Households, Treasuries around the
globe, and further its position as an Inflation Hedge, a perfect hedge against Currency or in
Short “A Safe Heaven”, in my view will continue. It will continue due to FEAR embedded in
12th October, 2009
everyone’s mind; the fear of losing investment value in any of the asset class mainly in Equities.
With GOLD being termed as one of the safest heaven and is being projected as “TRADE OF
EMOTIONS” in the western world; it was evident that money from Equity Markets was getting
diluted to GOLD.”
The Summary
Vinit Tulsyan http://vinittulsyan.wordpress.com

6 Markets: OK October but Rough & Tough November ahead
Markets in my expectation will continue to move higher during October in between
continued sideways movement and volatilities due to two reasons. One because of much
better than expected earnings reported by US financials, technology, healthcare majors in
next two weeks and continued good news on jobs front, retail sales, lower delinquencies,
higher mortgage application on the back of continued lower mortgage rates, manufacturing
data etc. And on the back of all these news, I also expect OIL to make newer highs during
this period.
Global markets (including Indian Markets) will continue to look for cues from US earning
season to move sideways with positive bias (with pop-ups to positive side occasionally). The
strength in broader markets on the back of global news flow will continue to support stocks,
which will be reporting Earnings back in our markets.
November in my expectation will be toughest period to be in the market. I do not expect the
markets to fall significantly, but, yes, I expect the market to become choppy, volatile and
move sideways, due to end of earnings season, increased focus towards debate over reverse
in policies by central bankers all around the globe and on Inflation. Even this choppiness
and sideways movement might have positive bias occasionally due to positive macro data
continuing to come out of west to support economic recovery in developed world.
I expect USD to slip further during November on the back of debate getting stronger on US
Federal Reserve becoming laggard in reversing policy regarding quantitative easing and
Interest rates. This might make debate over search for safe heavens to take centre-stage,
which might bring GOLD and Treasuries (higher bond prices) into limelight during this
period. I also expect the Rupee to reach newer highs during this period, on the back of
weakening USD, which could also strengthen on the back of stronger economic data coming
out of India and RBI’s statement during its monetary policy.
12th October, 2009
***
Thanking You,
Warm Personal Regards,
Vinit Tulsyan
http://vinittulsyan.wordpress.com
Vinit Tulsyan http://vinittulsyan.wordpress.com