Markets are getting jerky

Stock markets seem to be very nervous ahead of the budgets.. there is the lurking fear of the FM introducing/extending some market unfriendly measure - even a nominal increase in STT or short term capital gains tax can act as a dampener on the sentiment. The markets at this point in time don't have a major reason to go up. Results have been upto expectation and as the old adage goes "the only way when you are the top is to go down". Any analysis will show the indexes holding at this level is just because of the 4 heavyweights -Infy, Reliance, Bharti and Reliance. Most of the other stock movements have become non events. Mid caps as usual get hammered even in the smallest of corrections. The index might correct 5 % but they will be down anywhere between 15% to 30%.

It seems prudent to be in cash and partly dilute and en cash any major gains. In case of any major correction the Nifty can go down to 3600. Which is a good 10% from the current levels - which doesn't seem entirely un-plausible having seen 10% index dips during last year's steep correction.