Blow Out Phase In Emerging Equity Markets

Money flows from developed nations like US, UK, Europe is getting invested in fast growing economies like India, China, Taiwan, Singapore, HongKoong, Phillipines, Russia. This flow is very strong and there is almost herd mentality among them to enter these markets in a rush. This is causing extreme inflation in assets of these economies, notably in stocks. This money also is very reluctant to react to any adverse news and under such circumstances, making money at heightened valuations is an extremely challenging task for traders. Best to remain invested in excellent quality companies with excellent free cash flows and strongest of business fundamentals coupled with strong economic link.

News

These days market tend to react on every bit of news that comes in their way and they do that with great vigour, be it sub-prime mortgage mess in the U.S., Yen carry trade un-winding among larger financial institutions, rate cuts by U.S. Fed, Inflation etc.

Markets doesn't seem to be making up it's mind on future course as news flow is very fast and confusing, and markets hate uncertainity.

Manic Selling In The Markets

Markets today fell very sharply fearing more bad news from the cracks in the credit markets and yen carry trade un-winding. Yen got further strength and breached 112 mark against the dollar, creating more panic among investors and that caused japanese stocks to drop very sharply by 850 points. All other asian markets traded extremely weak and later in the trading session got some respite because of lowering of discount rate by U.S.federal reserve and some short covering. European markets opened in the positive territory and this will have good sentimental impact when U.S. markets opens later today.
Keeping extremely close eye and ear on credit markets will be they key going forward. Any bad news from this front in future will significantly damage already brittle investor/trader confidance.

Volatility Is Reducing In The Markets

For the past two days volatility is subsiding in the stock markets and this is a positive news as markets gets adusted to recent shocks they have got from U.S. sub-prime mortgage mess.
However more days of consolidation are needed to confirm the absorption of all the bad news by the markets.
Let's keep our fingers crossed.

Smart Strategy In Rising markets-Part 2

In times of extreme turbulance, hightened volatility, nervousness, tremendous uncertainity over extent of crisis that have caused panic selling in markets like we have at present due to mess in U.S. subprime mortgage market where investors don't know the extent to which this crisis is affecting the overal health of financial system, it's very prudent to be in cash since events like these can provide excellent long term buying oppurtunities once the dust settles down and markets have discounted totally all the bad news.